Victor Luis became the CEO of Tapestry, Inc. (NYSE:TPR) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Victor Luis’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Tapestry, Inc. has a market cap of US$9.4b, and is paying total annual CEO compensation of US$13m. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.4m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.5m.
Thus we can conclude that Victor Luis receives more in total compensation than the median of a group of companies in the same market, and of similar size to Tapestry, Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Tapestry, below.
Is Tapestry, Inc. Growing?
Tapestry, Inc. has increased its earnings per share (EPS) by an average of 6.9% a year, over the last three years (using a line of best fit). It achieved revenue growth of 15% over the last year.
I think the revenue growth is good. And, while modest, the earnings per share growth is noticeable. So while we’d stop just short of calling this a top performer, but we think it is well worth watching. Shareholders might be interested in this free visualization of analyst forecasts.
Has Tapestry, Inc. Been A Good Investment?
Since shareholders would have lost about 10% over three years, some Tapestry, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by Tapestry, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. So you may want to check if insiders are buying Tapestry shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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