In 2003 Kurt Darrow was appointed CEO of La-Z-Boy Incorporated (NYSE:LZB). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. 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 Kurt Darrow’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that La-Z-Boy Incorporated has a market cap of US$1.7b, and is paying total annual CEO compensation of US$4.4m. (This is based on the year to April 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$990k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3.4m.
So Kurt Darrow receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at La-Z-Boy, below.
Is La-Z-Boy Incorporated Growing?
La-Z-Boy Incorporated has increased its earnings per share (EPS) by an average of 8.0% a year, over the last three years (using a line of best fit). Its revenue is up 8.6% over last year.
I’m not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.
Has La-Z-Boy Incorporated Been A Good Investment?
Boasting a total shareholder return of 54% over three years, La-Z-Boy Incorporated 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.
Kurt Darrow is paid around the same as most CEOs of similar size companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So we can conclude that on this analysis the CEO compensation seems pretty sound. So you may want to check if insiders are buying La-Z-Boy shares with their own money (free access).
Important note: La-Z-Boy may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.