Jane Elfers became the CEO of The Children's Place, Inc. (NASDAQ:PLCE) in 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jane Elfers's Compensation Compare With Similar Sized Companies?
Our data indicates that The Children's Place, Inc. is worth US$1b, and total annual CEO compensation was reported as US$1.2m for the year to February 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.5m.
A first glance this seems like a real positive for shareholders, since Jane Elfers is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Children's Place, below.
Is The Children's Place, Inc. Growing?
Over the last three years The Children's Place, Inc. has shrunk its earnings per share by an average of 11% per year (measured with a line of best fit). It saw its revenue drop 4.5% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has The Children's Place, Inc. Been A Good Investment?
With a three year total loss of 31%, The Children's Place, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like The Children's Place, Inc. pays its CEO less than similar sized companies.
Jane Elfers is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. Shareholders may want to check for free if Children's Place insiders are buying or selling shares.
Important note: Children's Place may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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