Here's What We Learned About The CEO Pay At Crown Crafts, Inc. (NASDAQ:CRWS)

This article will reflect on the compensation paid to E. Chestnut who has served as CEO of Crown Crafts, Inc. (NASDAQ:CRWS) since 2001. This analysis will also assess whether Crown Crafts pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Crown Crafts

Comparing Crown Crafts, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Crown Crafts, Inc. has a market capitalization of US$76m, and reported total annual CEO compensation of US$903k for the year to March 2020. Notably, that's an increase of 13% over the year before. We note that the salary portion, which stands at US$461.3k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$596k. This suggests that E. Chestnut is paid more than the median for the industry. What's more, E. Chestnut holds US$3.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. It's interesting to note that Crown Crafts pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Crown Crafts, Inc.'s Growth

Crown Crafts, Inc.'s earnings per share (EPS) grew 30% per year over the last three years. In the last year, its revenue is up 3.8%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Crown Crafts, Inc. Been A Good Investment?

Boasting a total shareholder return of 48% over three years, Crown Crafts, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As previously discussed, E. is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, Crown Crafts has produced strong EPS growth and shareholder returns over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that E.'s performance creates value for the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Crown Crafts (1 is potentially serious!) that you should be aware of before investing here.

Important note: Crown Crafts is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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