In 2003 Kurt Darrow was appointed CEO of La-Z-Boy Incorporated (NYSE:LZB). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Kurt Darrow’s Compensation Compare With Similar Sized Companies?
Our data indicates that La-Z-Boy Incorporated is worth US$1.4b, and total annual CEO compensation is US$4.4m. That’s actually a decrease on the year before. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO compensation of that group was US$3.6m.
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.
The graphic below shows how CEO compensation at La-Z-Boy has changed from year to year.
Is La-Z-Boy Incorporated Growing?
La-Z-Boy Incorporated has increased its earnings per share (EPS) by an average of 7.4% a year, over the last three years Its revenue is up 4.9% over last year.
I’d prefer higher revenue growth, but I’m happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. So this free visualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.
Has La-Z-Boy Incorporated Been A Good Investment?
With a total shareholder return of 13% over three years, La-Z-Boy Incorporated shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Kurt Darrow is paid around the same as most CEOs of similar size companies.
We see room for improved growth, as well as fairly unremarkable returns over the last three years. But we don’t think the CEO compensation is a problem.
But note: La-Z-Boy may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.