Build-A-Bear Workshop, Inc.'s (NYSE:BBW) CEO Compensation Is Looking A Bit Stretched At The Moment

By
Simply Wall St
Published
June 03, 2021
NYSE:BBW

Under the guidance of CEO Sharon John, Build-A-Bear Workshop, Inc. (NYSE:BBW) has performed reasonably well recently. As shareholders go into the upcoming AGM on 10 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Build-A-Bear Workshop

Comparing Build-A-Bear Workshop, Inc.'s CEO Compensation With the industry

Our data indicates that Build-A-Bear Workshop, Inc. has a market capitalization of US$258m, and total annual CEO compensation was reported as US$1.9m for the year to January 2021. That's a notable decrease of 26% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$643k.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.1m. Hence, we can conclude that Sharon John is remunerated higher than the industry median. Moreover, Sharon John also holds US$9.7m worth of Build-A-Bear Workshop stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary US$643k US$714k 33%
Other US$1.3m US$1.9m 67%
Total CompensationUS$1.9m US$2.6m100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Build-A-Bear Workshop pays out 33% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:BBW CEO Compensation June 3rd 2021

A Look at Build-A-Bear Workshop, Inc.'s Growth Numbers

Over the past three years, Build-A-Bear Workshop, Inc. has seen its earnings per share (EPS) grow by 1.2% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Build-A-Bear Workshop, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Build-A-Bear Workshop, Inc. for providing a total return of 128% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Build-A-Bear Workshop that investors should look into moving forward.

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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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. 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.
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