Morris Goldfarb is the CEO of G-III Apparel Group, Ltd. (NASDAQ:GIII), and in this article, we analyze the executive’s compensation package with respect to the overall performance of the company. This analysis will also assess whether G-III Apparel Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Morris Goldfarb Compare With Other Companies In The Industry?
According to our data, G-III Apparel Group, Ltd. has a market capitalization of US$560m, and paid its CEO total annual compensation worth US$17m over the year to January 2020. That’s a slight decrease of 6.2% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.8m. This suggests that Morris Goldfarb is paid more than the median for the industry. Moreover, Morris Goldfarb also holds US$46m worth of G-III Apparel Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 31% of total compensation represents salary, while the remainder of 69% is other remuneration. In G-III Apparel Group’s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.
A Look at G-III Apparel Group, Ltd.’s Growth Numbers
G-III Apparel Group, Ltd. has seen its earnings per share (EPS) increase by 33% a year over the past three years. Its revenue is down 5.4% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. It’s always a tough situation when revenues are not growing, but ultimately profits are more important. Historical performance can sometimes be a good indicator on what’s coming up next but if you want to peer into the company’s future you might be interested in this free visualization of analyst forecasts.
Has G-III Apparel Group, Ltd. Been A Good Investment?
With a three year total loss of 59% for the shareholders, G-III Apparel Group, Ltd. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, G-III Apparel Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but it’s disappointing to see negative shareholder returns over the same period. Considering overall performance, we can’t say Morris is underpaid, in fact compensation is definitely on the higher side.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company’s key performance areas. We did our research and identified 3 warning signs (and 1 which is concerning) in G-III Apparel Group we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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