Is The Buckle, Inc.’s (NYSE:BKE) CEO Pay Justified?

Dennis Nelson became the CEO of The Buckle, Inc. (NYSE:BKE) in 1997. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Buckle

How Does Dennis Nelson’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that The Buckle, Inc. has a market cap of US$894m, and is paying total annual CEO compensation of US$3.0m. (This number is for the twelve months until February 2018). While we always look at total compensation first, we note that the salary component is less, at US$1m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.3m.

Thus we can conclude that Dennis Nelson receives more in total compensation than the median of a group of companies in the same market, and of similar size to The Buckle, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Buckle, below.

NYSE:BKE CEO Compensation, April 17th 2019
NYSE:BKE CEO Compensation, April 17th 2019

Is The Buckle, Inc. Growing?

Over the last three years The Buckle, Inc. has shrunk its earnings per share by an average of 16% per year (measured with a line of best fit). It saw its revenue drop -3.1% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has The Buckle, Inc. Been A Good Investment?

Given the total loss of 16% over three years, many shareholders in The Buckle, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared total CEO remuneration at The Buckle, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! So you may want to check if insiders are buying Buckle shares with their own money (free access).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.