Key Insights

• Ralph Lauren to hold its Annual General Meeting on 1st of August
• Total pay for CEO Patrice Jean Louvet includes US$1.35m salary
• The overall pay is comparable to the industry average
• Ralph Lauren's total shareholder return over the past three years was 60% while its EPS grew by 37% over the past three years

It would be hard to discount the role that CEO Patrice Jean Louvet has played in delivering the impressive results at Ralph Lauren Corporation (NYSE:RL) recently. Coming up to the next AGM on 1st of August, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

How Does Total Compensation For Patrice Jean Louvet Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ralph Lauren Corporation has a market capitalization of US$10b, and reported total annual CEO compensation of US$17m for the year to March 2024. We note that's an increase of 15% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.4m.

In comparison with other companies in the American Luxury industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$17m. From this we gather that Patrice Jean Louvet is paid around the median for CEOs in the industry. What's more, Patrice Jean Louvet holds US$4.0m worth of shares in the company in their own name.

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. It's interesting to note that Ralph Lauren allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ralph Lauren Corporation's Growth Numbers

Ralph Lauren Corporation has seen its earnings per share (EPS) increase by 37% a year over the past three years. It achieved revenue growth of 2.9% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Ralph Lauren Corporation Been A Good Investment?

Boasting a total shareholder return of 60% over three years, Ralph Lauren Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Ralph Lauren that investors should think about before committing capital to this stock.

Important note: Ralph Lauren is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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