We Think The Compensation For La-Z-Boy Incorporated's (NYSE:LZB) CEO Looks About Right
Key Insights
- La-Z-Boy will host its Annual General Meeting on 26th of August
- Total pay for CEO Melinda Whittington includes US$1.02m salary
- Total compensation is 33% below industry average
- La-Z-Boy's total shareholder return over the past three years was 48% while its EPS was down 11% over the past three years
Shareholders may be wondering what CEO Melinda Whittington plans to do to improve the less than great performance at La-Z-Boy Incorporated (NYSE:LZB) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 26th of August. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.
See our latest analysis for La-Z-Boy
How Does Total Compensation For Melinda Whittington Compare With Other Companies In The Industry?
According to our data, La-Z-Boy Incorporated has a market capitalization of US$1.6b, and paid its CEO total annual compensation worth US$6.7m over the year to April 2025. Notably, that's an increase of 13% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.
On comparing similar companies from the American Consumer Durables industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$9.9m. Accordingly, La-Z-Boy pays its CEO under the industry median. Moreover, Melinda Whittington also holds US$12m worth of La-Z-Boy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2025 | 2024 | Proportion (2025) |
| Salary | US$1.0m | US$982k | 15% |
| Other | US$5.6m | US$4.9m | 85% |
| Total Compensation | US$6.7m | US$5.9m | 100% |
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. In La-Z-Boy's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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 La-Z-Boy Incorporated's Growth Numbers
Over the last three years, La-Z-Boy Incorporated has shrunk its earnings per share by 11% per year. It achieved revenue growth of 3.0% over the last year.
The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 La-Z-Boy Incorporated Been A Good Investment?
Boasting a total shareholder return of 48% over three years, La-Z-Boy Incorporated has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for La-Z-Boy that you should be aware of before investing.
Important note: La-Z-Boy 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. 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.