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Here's Why We Think Manhattan Bridge Capital, Inc.'s (NASDAQ:LOAN) CEO Compensation Looks Fair for the time being

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Performance at Manhattan Bridge Capital, Inc. (NASDAQ:LOAN) has been reasonably good and CEO Assaf Ran has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 21 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Manhattan Bridge Capital

How Does Total Compensation For Assaf Ran Compare With Other Companies In The Industry?

Our data indicates that Manhattan Bridge Capital, Inc. has a market capitalization of US$66m, and total annual CEO compensation was reported as US$394k for the year to December 2020. We note that's an increase of 51% above last year. Notably, the salary which is US$305.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$394k. From this we gather that Assaf Ran is paid around the median for CEOs in the industry. Furthermore, Assaf Ran directly owns US$18m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

US$305k

US$254k

77%

Other

US$89k

US$7.6k

23%

Total Compensation

US$394k

US$262k

100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. According to our research, Manhattan Bridge Capital has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

ceo-compensation
ceo-compensation

A Look at Manhattan Bridge Capital, Inc.'s Growth Numbers

Over the last three years, Manhattan Bridge Capital, Inc. has not seen its earnings per share change much, though there is a slight positive movement. In the last year, its revenue changed by just 0.9%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Manhattan Bridge Capital, Inc. Been A Good Investment?

Manhattan Bridge Capital, Inc. has served shareholders reasonably well, with a total return of 20% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Manhattan Bridge Capital (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Manhattan Bridge Capital, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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