Most Shareholders Will Probably Agree With Signet Jewelers Limited's (NYSE:SIG) CEO Compensation

Key Insights

• Signet Jewelers' Annual General Meeting to take place on 28th of June
• Salary of US$1.50m is part of CEO Gina Drosos's total remuneration
• The overall pay is comparable to the industry average
• Signet Jewelers' total shareholder return over the past three years was 20% while its EPS grew by 38% over the past three years

CEO Gina Drosos has done a decent job of delivering relatively good performance at Signet Jewelers Limited (NYSE:SIG) recently. As shareholders go into the upcoming AGM on 28th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Signet Jewelers

How Does Total Compensation For Gina Drosos Compare With Other Companies In The Industry?

At the time of writing, our data shows that Signet Jewelers Limited has a market capitalization of US$4.1b, and reported total annual CEO compensation of US$9.0m for the year to February 2024. That's a notable decrease of 18% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.5m.

On comparing similar companies from the American Specialty Retail industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$9.0m. From this we gather that Gina Drosos is paid around the median for CEOs in the industry. Moreover, Gina Drosos also holds US$60m worth of Signet Jewelers stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$1.5m	US$1.5m	17%
Other	US$7.5m	US$9.5m	83%
Total Compensation	US$9.0m	US$11m	100%

Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. Although there is a difference in how total compensation is set, Signet Jewelers more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Signet Jewelers Limited's Growth Numbers

Over the past three years, Signet Jewelers Limited has seen its earnings per share (EPS) grow by 38% per year. Its revenue is down 8.5% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Signet Jewelers Limited Been A Good Investment?

With a total shareholder return of 20% over three years, Signet Jewelers Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Signet Jewelers you should be aware of, and 1 of them shouldn't be ignored.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com