How much performance penalty does a hierarchical coder based on multistage vector quantization (MSVQ) suffer compared to a non-hierarchical coder based on fixed rate VQ? In this paper, the above question shall be answered from a rate-distortion theoretic perspective. We analyze several results from high-rate or asymptotic quantization theory and use them to specify an upper bound on the MSVQ penalty in terms of mean square error (MSE) distortion. The theoretical results are used to gain more analytic insight in hierarchical coding systems based on a multistage coding approach. Although entirely based on high-rate assumptions, in practice this bound also applies for relatively small rates as shown by experiment.