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Rick Wessel became the CEO of FirstCash, Inc. (NASDAQ:FCFS) in 2006, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing FirstCash, Inc.'s CEO Compensation With the industry
Our data indicates that FirstCash, Inc. has a market capitalization of US$2.6b, and total annual CEO compensation was reported as US$7.4m for the year to December 2019. We note that's a small decrease of 4.8% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$7.4m. So it looks like FirstCash compensates Rick Wessel in line with the median for the industry. What's more, Rick Wessel holds US$52m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. Although there is a difference in how total compensation is set, FirstCash more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at FirstCash, Inc.'s Growth Numbers
FirstCash, Inc.'s earnings per share (EPS) grew 22% per year over the last three years. In the last year, its revenue is up 3.6%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has FirstCash, Inc. Been A Good Investment?
FirstCash, Inc. has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
As we touched on above, FirstCash, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, it's admirable that over the last three years, earnings growth for the company has been impressive, though the same can't be said for investor returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for FirstCash that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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