Key Insights

• Regional Management will host 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.

How Does Total Compensation For Rob Beck Compare With Other Companies In The Industry?

Our data indicates that Regional Management Corp. has a market capitalization of US$294m, and total annual CEO compensation was reported as 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.

On examining similar-sized companies in the American Consumer Finance industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.7m. Accordingly, our analysis reveals that Regional Management Corp. pays Rob Beck north of the industry median. Moreover, Rob Beck also holds US$3.4m worth of Regional Management stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. In Regional Management's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

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. Its revenue is up 6.9% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Regional Management Corp. Been A Good Investment?

Since shareholders would have lost about 23% over three years, some Regional Management Corp. investors would surely be feeling negative emotions. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Regional Management (1 doesn't sit too well with us!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.