Key Insights

• Movado Group will host its Annual General Meeting on 20th of June
• CEO Efraim Grinberg's total compensation includes salary of US$1.25m
• Total compensation is 2,727% above industry average
• Movado Group's three-year loss to shareholders was 3.5% while its EPS was down 3.9% over the past three years

The results at Movado Group, Inc. (NYSE:MOV) have been quite disappointing recently and CEO Efraim Grinberg bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Comparing Movado Group, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Movado Group, Inc. has a market capitalization of US$567m, and reported total annual CEO compensation of US$5.1m for the year to January 2024. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.

In comparison with other companies in the American Luxury industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$180k. Accordingly, our analysis reveals that Movado Group, Inc. pays Efraim Grinberg north of the industry median. Moreover, Efraim Grinberg also holds US$54m worth of Movado Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. Movado Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Movado Group, Inc.'s Growth

Movado Group, Inc. has reduced its earnings per share by 3.9% a year over the last three years. In the last year, its revenue is down 9.4%.

The decline in EPS is a bit concerning. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Movado Group, Inc. Been A Good Investment?

Given the total shareholder loss of 3.5% over three years, many shareholders in Movado Group, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Movado Group that investors should be aware of in a dynamic business environment.

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.