Yahoo Finance This Is Why Columbia Sportswear Company's (NASDAQ:COLM) CEO Compensation Looks Appropriate
Key Insights
Columbia Sportswear will host its Annual General Meeting on 30th of May
CEO Tim Boyle's total compensation includes salary of US$1.07m
The total compensation is 89% less than the average for the industry
Columbia Sportswear's EPS grew by 19% over the past three years while total shareholder loss over the past three years was 15%
The performance at Columbia Sportswear Company (NASDAQ:COLM) has been rather lacklustre of late and shareholders may be wondering what CEO Tim Boyle is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 30th of May. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.
See our latest analysis for Columbia Sportswear
Comparing Columbia Sportswear Company's CEO Compensation With The Industry
According to our data, Columbia Sportswear Company has a market capitalization of US$5.0b, and paid its CEO total annual compensation worth US$1.6m over the year to December 2023. We note that's a decrease of 41% compared to last year. In particular, the salary of US$1.07m, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the American Luxury industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$14m. This suggests that Tim Boyle is paid below the industry median. Moreover, Tim Boyle also holds US$2.0b worth of Columbia Sportswear stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.1m | US$1.0m | 66% |
Other | US$550k | US$1.7m | 34% |
Total Compensation | US$1.6m | US$2.8m | 100% |
On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. It's interesting to note that Columbia Sportswear pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Columbia Sportswear Company's Growth
Over the past three years, Columbia Sportswear Company has seen its earnings per share (EPS) grow by 19% per year. Its revenue is down 2.5% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Columbia Sportswear Company Been A Good Investment?
Since shareholders would have lost about 15% over three years, some Columbia Sportswear Company investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
So you may want to check if insiders are buying Columbia Sportswear shares with their own money (free access).
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. 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.
