In 1997 Jean Madar was appointed CEO of Inter Parfums, Inc. (NASDAQ:IPAR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. 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 Jean Madar’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Inter Parfums, Inc. has a market cap of US$2.2b, and is paying total annual CEO compensation of US$995k. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$630k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.0m.
Most shareholders would consider it a positive that Jean Madar takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Inter Parfums has changed over time.
Is Inter Parfums, Inc. Growing?
Over the last three years Inter Parfums, Inc. has grown its earnings per share (EPS) by an average of 22% per year (using a line of best fit). Its revenue is up 10% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
Has Inter Parfums, Inc. Been A Good Investment?
I think that the total shareholder return of 118%, over three years, would leave most Inter Parfums, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
It looks like Inter Parfums, Inc. pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Jean Madar deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Inter Parfums shares with their own money (free access).
Important note: Inter Parfums may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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