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Should Shareholders Reconsider Regional Management Corp.'s (NYSE:RM) CEO Compensation Package?

Key Insights

  • Regional Management to hold its Annual General Meeting on 16th of May

  • Salary of US$660.0k is part of CEO Rob Beck's total remuneration

  • The total compensation is 212% higher than the average for the industry

  • Regional Management's three-year loss to shareholders was 23% while its EPS was down 25% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Regional Management Corp. (NYSE:RM) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 16th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Regional Management

Comparing Regional Management Corp.'s CEO Compensation With The Industry

At the time of writing, our data shows that Regional Management Corp. has a market capitalization of US$294m, and reported total annual CEO compensation of US$5.3m for the year to December 2023. That's a fairly small increase of 7.7% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$660k.

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For comparison, other companies in the American Consumer Finance industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.7m. Accordingly, our analysis reveals that Regional Management Corp. pays Rob Beck north of the industry median. What's more, Rob Beck holds US$3.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2023

2022

Proportion (2023)

Salary

US$660k

US$660k

12%

Other

US$4.6m

US$4.3m

88%

Total Compensation

US$5.3m

US$4.9m

100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. It's interesting to note that Regional Management allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Regional Management Corp.'s Growth Numbers

Over the last three years, Regional Management Corp. has shrunk its earnings per share by 25% per year. It achieved revenue growth of 6.9% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Regional Management Corp. Been A Good Investment?

Given the total shareholder loss of 23% over three years, many shareholders in Regional Management Corp. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Regional Management you should be aware of, and 1 of them is potentially serious.

Switching gears from Regional Management, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.