Vera Bradley, Inc.'s (NASDAQ:VRA) CEO Compensation Is Looking A Bit Stretched At The Moment

In the past three years, shareholders of Vera Bradley, Inc. (NASDAQ:VRA) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 03 June 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Vera Bradley

Comparing Vera Bradley, Inc.'s CEO Compensation With the industry

According to our data, Vera Bradley, Inc. has a market capitalization of US$382m, and paid its CEO total annual compensation worth US$2.7m over the year to January 2021. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$647k.

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$1.7m. Accordingly, our analysis reveals that Vera Bradley, Inc. pays Robert Wallstrom north of the industry median. Furthermore, Robert Wallstrom directly owns US$5.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	US$647k	US$796k	24%
Other	US$2.1m	US$1.9m	76%
Total Compensation	US$2.7m	US$2.7m	100%

On an industry level, around 21% of total compensation represents salary and 79% is other remuneration. It's interesting to note that Vera Bradley pays out a greater portion of remuneration through salary, compared to the industry. 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. has seen its earnings per share (EPS) increase by 10% a year over the past three years. It saw its revenue drop 5.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Vera Bradley, Inc. Been A Good Investment?

Given the total shareholder loss of 5.4% over three years, many shareholders in Vera Bradley, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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