Shareholders May Be Wary Of Increasing Movado Group, Inc.'s (NYSE:MOV) CEO Compensation Package

Key Insights

• Movado Group's Annual General Meeting to take place on 20th of June
• Salary of US$1.25m is part of CEO Efraim Grinberg's total remuneration
• The overall pay is 2,727% above the industry average
• Movado Group's three-year loss to shareholders was 3.5% while its EPS was down 3.9% over the past three years

The results at Movado Group, Inc. (NYSE:MOV) have been quite disappointing recently and CEO Efraim Grinberg bears some responsibility for this. At the upcoming AGM on 20th of June, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Movado Group

How Does Total Compensation For Efraim Grinberg Compare With Other Companies In The Industry?

At the time of writing, our data shows that Movado Group, Inc. has a market capitalization of US$567m, and reported total annual CEO compensation of US$5.1m for the year to January 2024. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.

For comparison, other companies in the American Luxury industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$180k. Accordingly, our analysis reveals that Movado Group, Inc. pays Efraim Grinberg north of the industry median. Moreover, Efraim Grinberg also holds US$54m worth of Movado Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$1.3m	US$1.3m	25%
Other	US$3.8m	US$3.8m	75%
Total Compensation	US$5.1m	US$5.1m	100%

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. Our data reveals that Movado Group allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Movado Group, Inc.'s Growth Numbers

Over the last three years, Movado Group, Inc. has shrunk its earnings per share by 3.9% per year. In the last year, its revenue is down 9.4%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Movado Group, Inc. Been A Good Investment?

Since shareholders would have lost about 3.5% over three years, some Movado Group, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Movado Group that you should be aware of before investing.

Important note: Movado Group 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.