This article will reflect on the compensation paid to Robert Wallstrom who has served as CEO of Vera Bradley, Inc. (NASDAQ:VRA) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Vera Bradley.
Comparing Vera Bradley, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Vera Bradley, Inc. has a market capitalization of US$283m, and reported total annual CEO compensation of US$2.7m for the year to February 2020. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$796k.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.6m. This suggests that Robert Wallstrom is paid more than the median for the industry. Moreover, Robert Wallstrom also holds US$3.9m worth of Vera Bradley stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. Our data reveals that Vera Bradley allocates salary more or less in line with the wider market. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Vera Bradley, Inc.'s Growth Numbers
Vera Bradley, Inc.'s earnings per share (EPS) grew 94% per year over the last three years. Its revenue is up 5.8% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Vera Bradley, Inc. Been A Good Investment?
With a three year total loss of 18% for the shareholders, Vera Bradley, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Vera Bradley pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Vera Bradley that investors should look into moving forward.
Important note: Vera Bradley 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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