Is Tilly’s, Inc. (NYSE:TLYS) Overpaying Its CEO?

Ed Thomas became the CEO of Tilly’s, Inc. (NYSE:TLYS) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Tilly’s

How Does Ed Thomas’s Compensation Compare With Similar Sized Companies?

Our data indicates that Tilly’s, Inc. is worth US$261m, and total annual CEO compensation was reported as US$1.7m for the year to February 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$700k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.

It would therefore appear that Tilly’s, Inc. pays Ed Thomas more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Tilly’s has changed from year to year.

NYSE:TLYS CEO Compensation, January 23rd 2020
NYSE:TLYS CEO Compensation, January 23rd 2020

Is Tilly’s, Inc. Growing?

Over the last three years Tilly’s, Inc. has grown its earnings per share (EPS) by an average of 32% per year (using a line of best fit). Its revenue is up 4.3% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.

Has Tilly’s, Inc. Been A Good Investment?

Given the total loss of 10% over three years, many shareholders in Tilly’s, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We examined the amount Tilly’s, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Tilly’s (free visualization of insider trades).

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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