Is Regional Management Corp.'s (NYSE:RM) CEO Being Overpaid?

Simply Wall St

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Peter Knitzer has been the CEO of Regional Management Corp. (NYSE:RM) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Regional Management

How Does Peter Knitzer's Compensation Compare With Similar Sized Companies?

Our data indicates that Regional Management Corp. is worth US$300m, and total annual CEO compensation is US$2.6m. (This is based on the year to December 2018). That's a notable increase of 30% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$550k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.8m.

It would therefore appear that Regional Management Corp. pays Peter Knitzer more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Regional Management, below.

NYSE:RM CEO Compensation, June 12th 2019

Is Regional Management Corp. Growing?

Regional Management Corp. has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 14%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Regional Management Corp. Been A Good Investment?

Boasting a total shareholder return of 78% over three years, Regional Management Corp. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared the total CEO remuneration paid by Regional Management Corp., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Regional Management shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.