Shareholders May Be A Bit More Conservative With Shift4 Payments, Inc.'s (NYSE:FOUR) CEO Compensation For Now
Key Insights
Shift4 Payments will host its Annual General Meeting on 7th of June
CEO Jared Isaacman's total compensation includes salary of US$50.0k
The total compensation is similar to the average for the industry
Over the past three years, Shift4 Payments' EPS grew by 100% and over the past three years, the total loss to shareholders 29%
The underwhelming share price performance of Shift4 Payments, Inc. (NYSE:FOUR) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 7th of June. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Shift4 Payments
Comparing Shift4 Payments, Inc.'s CEO Compensation With The Industry
According to our data, Shift4 Payments, Inc. has a market capitalization of US$5.7b, and paid its CEO total annual compensation worth US$8.9m over the year to December 2023. Notably, that's an increase of 27% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$50k.
For comparison, other companies in the American Diversified Financial industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$10.0m. From this we gather that Jared Isaacman is paid around the median for CEOs in the industry. Furthermore, Jared Isaacman directly owns US$156m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$50k | US$50k | 1% |
Other | US$8.9m | US$7.0m | 99% |
Total Compensation | US$8.9m | US$7.0m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but Shift4 Payments paid Jared Isaacman a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. 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 Shift4 Payments, Inc.'s Growth Numbers
Shift4 Payments, Inc.'s earnings per share (EPS) grew 100% per year over the last three years. Its revenue is up 27% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Shift4 Payments, Inc. Been A Good Investment?
Since shareholders would have lost about 29% over three years, some Shift4 Payments, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Shift4 Payments primarily uses non-salary benefits to reward its CEO. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Shift4 Payments that investors should think about before committing capital to this stock.
Important note: Shift4 Payments 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.