E. Chestnut became the CEO of Crown Crafts, Inc. (NASDAQ:CRWS) in 2001. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does E. Chestnut’s Compensation Compare With Similar Sized Companies?
According to our data, Crown Crafts, Inc. has a market capitalization of US$50m, and pays its CEO total annual compensation worth US$799k. (This figure is for the year to March 2019). We note that’s an increase of 64% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$464k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$483k.
As you can see, E. Chestnut is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Crown Crafts, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Crown Crafts has changed from year to year.
Is Crown Crafts, Inc. Growing?
On average over the last three years, Crown Crafts, Inc. has shrunk earnings per share by 22% each year (measured with a line of best fit). In the last year, its revenue is up 8.8%.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Crown Crafts, Inc. Been A Good Investment?
Given the total loss of 39% over three years, many shareholders in Crown Crafts, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Crown Crafts, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Arguably worse, investors are without a positive return for the last three years. This contrasts with the growth in CEO remuneration, year on year. Some might well form the view that the CEO is paid too generously! Shareholders may want to check for free if Crown Crafts insiders are buying or selling shares.
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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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.