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Rick Wessel became the CEO of FirstCash, Inc. (NASDAQ:FCFS) in 2006. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Rick Wessel's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that FirstCash, Inc. has a market cap of US$4.1b, and is paying total annual CEO compensation of US$7.8m. (This number is for the twelve months until December 2018). We note that's an increase of 26% above last year. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.2m.
It would therefore appear that FirstCash, Inc. pays Rick Wessel more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at FirstCash has changed over time.
Is FirstCash, Inc. Growing?
FirstCash, Inc. has increased its earnings per share (EPS) by an average of 29% a year, over the last three years (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has FirstCash, Inc. Been A Good Investment?
Most shareholders would probably be pleased with FirstCash, Inc. for providing a total return of 115% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount FirstCash, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling FirstCash shares (free trial).
If you want to buy a stock that is better than FirstCash, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.