Is Vince Holding Corp.’s (NYSE:VNCE) CEO Pay Justified?

Brendan Hoffman has been the CEO of Vince Holding Corp. (NYSE:VNCE) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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.

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See our latest analysis for Vince Holding

How Does Brendan Hoffman’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Vince Holding Corp. has a market cap of US$168m, and is paying total annual CEO compensation of US$2.8m. (This is based on the year to February 2019). We note that’s an increase of 60% above last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$900k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.1m.

As you can see, Brendan Hoffman is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Vince Holding Corp. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Vince Holding has changed over time.

NYSE:VNCE CEO Compensation, May 20th 2019
NYSE:VNCE CEO Compensation, May 20th 2019

Is Vince Holding Corp. Growing?

On average over the last three years, Vince Holding Corp. has grown earnings per share (EPS) by 26% each year (using a line of best fit). In the last year, its revenue is up 2.4%.

This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.

Has Vince Holding Corp. Been A Good Investment?

Since shareholders would have lost about 75% over three years, some Vince Holding Corp. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared total CEO remuneration at Vince Holding Corp. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. This contrasts with the growth in CEO remuneration, in the last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Vince Holding.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.