Key Insights

• ARC Document Solutions' Annual General Meeting to take place on 1st of May
• CEO Suri Suriyakumar's total compensation includes salary of US$800.0k
• The overall pay is 86% above the industry average
• ARC Document Solutions' total shareholder return over the past three years was 42% while its EPS grew by 9.8% over the past three years

Under the guidance of CEO Suri Suriyakumar, ARC Document Solutions, Inc. (NYSE:ARC) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 1st of May. However, some shareholders will still be cautious of paying the CEO excessively.

Comparing ARC Document Solutions, Inc.'s CEO Compensation With The Industry

According to our data, ARC Document Solutions, Inc. has a market capitalization of US$118m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2023. We note that's a decrease of 27% compared to last year. In particular, the salary of US$800.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the American Commercial Services industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$748k. Accordingly, our analysis reveals that ARC Document Solutions, Inc. pays Suri Suriyakumar north of the industry median. Moreover, Suri Suriyakumar also holds US$13m worth of ARC Document Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. ARC Document Solutions is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at ARC Document Solutions, Inc.'s Growth Numbers

Over the past three years, ARC Document Solutions, Inc. has seen its earnings per share (EPS) grow by 9.8% per year. Its revenue is down 1.7% over the previous year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has ARC Document Solutions, Inc. Been A Good Investment?

We think that the total shareholder return of 42%, over three years, would leave most ARC Document Solutions, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for ARC Document Solutions that investors should think about before committing capital to this stock.

Important note: ARC Document Solutions 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.