Here's Why Ethan Allen Interiors Inc.'s (NYSE:ETD) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• Ethan Allen Interiors' Annual General Meeting to take place on 5th of November
• Salary of US$1.15m is part of CEO M. Kathwari's total remuneration
• Total compensation is 39% below industry average
• Ethan Allen Interiors' total shareholder return over the past three years was 29% while its EPS was down 21% over the past three years

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Performance at Ethan Allen Interiors Inc. (NYSE:ETD) has been rather uninspiring recently and shareholders may be wondering how CEO M. Kathwari plans to fix this. At the next AGM coming up on 5th of November, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Ethan Allen Interiors

How Does Total Compensation For M. Kathwari Compare With Other Companies In The Industry?

Our data indicates that Ethan Allen Interiors Inc. has a market capitalization of US$717m, and total annual CEO compensation was reported as US$3.8m for the year to June 2025. We note that's an increase of 19% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

For comparison, other companies in the American Consumer Durables industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$6.3m. In other words, Ethan Allen Interiors pays its CEO lower than the industry median. What's more, M. Kathwari holds US$45m 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 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Ethan Allen Interiors is paying a higher share of its remuneration through a salary in comparison to the overall 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 Ethan Allen Interiors Inc.'s Growth Numbers

Over the last three years, Ethan Allen Interiors Inc. has shrunk its earnings per share by 21% per year. Its revenue is down 4.9% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Ethan Allen Interiors Inc. Been A Good Investment?

With a total shareholder return of 29% over three years, Ethan Allen Interiors Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Ethan Allen Interiors (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.