Stock Analysis

Shareholders May Be Wary Of Increasing Weyco Group, Inc.'s (NASDAQ:WEYS) CEO Compensation Package

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NasdaqGS:WEYS
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Shareholders will probably not be too impressed with the underwhelming results at Weyco Group, Inc. (NASDAQ:WEYS) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 04 May 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Weyco Group

Comparing Weyco Group, Inc.'s CEO Compensation With the industry

According to our data, Weyco Group, Inc. has a market capitalization of US$191m, and paid its CEO total annual compensation worth US$744k over the year to December 2020. We note that's a decrease of 27% compared to last year. Notably, the salary which is US$655.8k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$192k. Accordingly, our analysis reveals that Weyco Group, Inc. pays Thomas Florsheim north of the industry median. Furthermore, Thomas Florsheim directly owns US$22m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$656k US$679k 88%
Other US$88k US$335k 12%
Total CompensationUS$744k US$1.0m100%

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. According to our research, Weyco Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
NasdaqGS:WEYS CEO Compensation April 28th 2021

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

Weyco Group, Inc. has reduced its earnings per share by 39% a year over the last three years. Its revenue is down 36% over the previous year.

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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Weyco Group, Inc. Been A Good Investment?

With a total shareholder return of -39% over three years, Weyco Group, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Weyco Group (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

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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