Yahoo Finance We Think Shareholders May Want To Consider A Review Of Encore Capital Group, Inc.'s (NASDAQ:ECPG) CEO Compensation Package
Key Insights
Encore Capital Group will host its Annual General Meeting on 7th of June
Salary of US$861.1k is part of CEO Ashish Masih's total remuneration
The total compensation is similar to the average for the industry
Encore Capital Group's three-year loss to shareholders was 6.6% while its EPS was down 79% over the past three years
Encore Capital Group, Inc. (NASDAQ:ECPG) has not performed well recently and CEO Ashish Masih will probably need to up their game. At the upcoming AGM on 7th of June, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Encore Capital Group
How Does Total Compensation For Ashish Masih Compare With Other Companies In The Industry?
According to our data, Encore Capital Group, Inc. has a market capitalization of US$1.0b, and paid its CEO total annual compensation worth US$5.0m over the year to December 2023. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$861k.
On comparing similar companies from the American Consumer Finance industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$4.8m. From this we gather that Ashish Masih is paid around the median for CEOs in the industry. What's more, Ashish Masih holds US$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$861k | US$832k | 17% |
Other | US$4.2m | US$4.3m | 83% |
Total Compensation | US$5.0m | US$5.1m | 100% |
Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. Encore Capital Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Encore Capital Group, Inc.'s Growth
Over the last three years, Encore Capital Group, Inc. has shrunk its earnings per share by 79% per year. It achieved revenue growth of 2.2% over the last year.
Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Encore Capital Group, Inc. Been A Good Investment?
Since shareholders would have lost about 6.6% over three years, some Encore Capital Group, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
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, the board will get the chance to explain the steps it plans to take to improve business performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Encore Capital Group that investors should be aware of in a dynamic business environment.
Important note: Encore Capital Group 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.
