Key Insights
- Arhaus' Annual General Meeting to take place on 15th of May
- CEO John Reed's total compensation includes salary of US$1.49m
- The total compensation is 56% less than the average for the industry
- Arhaus' total shareholder return over the past three years was 39% while its EPS grew by 39% over the past three years
The impressive results at Arhaus, Inc. (NASDAQ:ARHS) recently will be great news for shareholders. At the upcoming AGM on 15th of May, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.
Check out our latest analysis for Arhaus
Comparing Arhaus, Inc.'s CEO Compensation With The Industry
Our data indicates that Arhaus, Inc. has a market capitalization of US$1.1b, and total annual CEO compensation was reported as US$2.3m for the year to December 2024. We note that's a decrease of 21% compared to last year. Notably, the salary which is US$1.49m, represents most of the total compensation being paid.
For comparison, other companies in the American Specialty Retail industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$5.1m. That is to say, John Reed is paid under the industry median. What's more, John Reed holds US$377m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.5m | US$1.4m | 66% |
| Other | US$766k | US$1.4m | 34% |
| Total Compensation | US$2.3m | US$2.9m | 100% |
Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. According to our research, Arhaus has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Arhaus, Inc.'s Growth Numbers
Arhaus, Inc. has seen its earnings per share (EPS) increase by 39% a year over the past three years. Its revenue is down 1.3% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Arhaus, Inc. Been A Good Investment?
We think that the total shareholder return of 39%, over three years, would leave most Arhaus, Inc. shareholders smiling. 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.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Arhaus you should be aware of, and 1 of them is potentially serious.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.