We Discuss Why i3 Verticals, Inc.'s (NASDAQ:IIIV) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year
Key Insights
i3 Verticals' Annual General Meeting to take place on 22nd of February
Salary of US$337.2k is part of CEO Greg Daily's total remuneration
The overall pay is 88% below the industry average
Over the past three years, i3 Verticals' EPS fell by 4.2% and over the past three years, the total loss to shareholders 35%
The underwhelming performance at i3 Verticals, Inc. (NASDAQ:IIIV) recently has probably not pleased shareholders. The next AGM coming up on 22nd of February will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. The data we gathered below shows that CEO compensation looks acceptable for now.
View our latest analysis for i3 Verticals
How Does Total Compensation For Greg Daily Compare With Other Companies In The Industry?
At the time of writing, our data shows that i3 Verticals, Inc. has a market capitalization of US$660m, and reported total annual CEO compensation of US$346k for the year to September 2023. That's a fairly small increase of 3.4% over the previous year. We note that the salary portion, which stands at US$337.2k constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the American Diversified Financial industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$2.8m. Accordingly, i3 Verticals pays its CEO under the industry median. What's more, Greg Daily holds US$4.8m 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$337k | US$325k | 98% |
Other | US$8.4k | US$9.1k | 2% |
Total Compensation | US$346k | US$334k | 100% |
Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. i3 Verticals is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
i3 Verticals, Inc.'s Growth
Over the last three years, i3 Verticals, Inc. has shrunk its earnings per share by 4.2% per year. Its revenue is up 14% over the last year.
The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has i3 Verticals, Inc. Been A Good Investment?
Few i3 Verticals, Inc. shareholders would feel satisfied with the return of -35% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Greg receives almost all of their compensation through a salary. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for i3 Verticals (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Important note: i3 Verticals 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.
