Shareholders May Not Be So Generous With Signet Jewelers Limited's (NYSE:SIG) CEO Compensation And Here's Why

By
Simply Wall St
Published
June 18, 2021
NYSE:SIG
Source: Shutterstock

Under the guidance of CEO Gina Drosos, Signet Jewelers Limited (NYSE:SIG) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 25 June 2021. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Signet Jewelers

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

Our data indicates that Signet Jewelers Limited has a market capitalization of US$3.9b, and total annual CEO compensation was reported as US$12m for the year to January 2021. That's a notable increase of 32% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.4m.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$8.2m. This suggests that Gina Drosos is paid more than the median for the industry. Moreover, Gina Drosos also holds US$22m worth of Signet Jewelers stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary US$1.4m US$1.5m 11%
Other US$11m US$7.7m 89%
Total CompensationUS$12m US$9.2m100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. It's interesting to note that Signet Jewelers allocates a smaller portion of compensation to salary in comparison to the broader industry. 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:SIG CEO Compensation June 18th 2021

Signet Jewelers Limited's Growth

Over the past three years, Signet Jewelers Limited has seen its earnings per share (EPS) grow by 58% per year. It achieved revenue growth of 9.0% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Signet Jewelers Limited Been A Good Investment?

Boasting a total shareholder return of 42% over three years, Signet Jewelers Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its 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. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is significant) in Signet Jewelers we think you should know about.

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. 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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