Shareholders May Be Wary Of Increasing Xcel Brands, Inc.'s (NASDAQ:XELB) CEO Compensation Package

The results at Xcel Brands, Inc. (NASDAQ:XELB) have been quite disappointing recently and CEO Robert D'Loren bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 18 November 2022. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Xcel Brands

Comparing Xcel Brands, Inc.'s CEO Compensation With The Industry

According to our data, Xcel Brands, Inc. has a market capitalization of US$19m, and paid its CEO total annual compensation worth US$1.6m over the year to December 2021. We note that's an increase of 9.5% above last year. We note that the salary of US$888.5k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$912k. Hence, we can conclude that Robert D'Loren is remunerated higher than the industry median. Moreover, Robert D'Loren also holds US$4.6m worth of Xcel Brands stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	US$889k	US$759k	57%
Other	US$665k	US$660k	43%
Total Compensation	US$1.6m	US$1.4m	100%

On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. Xcel Brands is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Xcel Brands, Inc.'s Growth

Xcel Brands, Inc. has reduced its earnings per share by 48% a year over the last three years. In the last year, its revenue is up 9.4%.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Xcel Brands, Inc. Been A Good Investment?

With a total shareholder return of -40% over three years, Xcel Brands, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Xcel Brands that investors should look into moving forward.

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.