This article will reflect on the compensation paid to Kevin Stevenson who has served as CEO of PRA Group, Inc. (NASDAQ:PRAA) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Kevin Stevenson Compare With Other Companies In The Industry?
According to our data, PRA Group, Inc. has a market capitalization of US$1.8b, and paid its CEO total annual compensation worth US$4.7m over the year to December 2019. We note that's an increase of 20% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$900k.
On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$1.3m. This suggests that Kevin Stevenson is paid more than the median for the industry. Moreover, Kevin Stevenson also holds US$9.3m worth of PRA Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. PRA Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
PRA Group, Inc.'s Growth
Over the past three years, PRA Group, Inc. has seen its earnings per share (EPS) grow by 20% per year. Its revenue is up 7.8% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 PRA Group, Inc. Been A Good Investment?
Boasting a total shareholder return of 40% over three years, PRA Group, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we noted earlier, PRA Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, PRA Group has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Kevin deserves a raise!
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for PRA Group that investors should look into moving forward.
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.
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. 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.
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