Yahoo Finance We Think Upstart Holdings, Inc.'s (NASDAQ:UPST) CEO Compensation Package Needs To Be Put Under A Microscope
Key Insights
Upstart Holdings' Annual General Meeting to take place on 29th of May
Salary of US$460.0k is part of CEO Dave Girouard's total remuneration
The total compensation is similar to the average for the industry
Over the past three years, Upstart Holdings' EPS fell by 96% and over the past three years, the total loss to shareholders 83%
Shareholders will probably not be too impressed with the underwhelming results at Upstart Holdings, Inc. (NASDAQ:UPST) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 29th 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. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for Upstart Holdings
How Does Total Compensation For Dave Girouard Compare With Other Companies In The Industry?
At the time of writing, our data shows that Upstart Holdings, Inc. has a market capitalization of US$2.2b, and reported total annual CEO compensation of US$7.1m for the year to December 2023. Notably, that's a decrease of 26% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$460k.
On comparing similar companies from the American Consumer Finance industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$6.8m. So it looks like Upstart Holdings compensates Dave Girouard in line with the median for the industry. Furthermore, Dave Girouard directly owns US$261m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$460k | US$460k | 6% |
Other | US$6.7m | US$9.1m | 94% |
Total Compensation | US$7.1m | US$9.6m | 100% |
Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. Upstart Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Upstart Holdings, Inc.'s Growth Numbers
Over the last three years, Upstart Holdings, Inc. has shrunk its earnings per share by 96% per year. It saw its revenue drop 12% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Upstart Holdings, Inc. Been A Good Investment?
With a total shareholder return of -83% over three years, Upstart Holdings, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Upstart Holdings that you should be aware of before investing.
Switching gears from Upstart Holdings, 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.
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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.
