How Should Investors React To FirstCash, Inc.’s (NASDAQ:FCFS) CEO Pay?

In 2006 Rick Wessel was appointed CEO of FirstCash, Inc. (NASDAQ:FCFS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. 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.

See our latest analysis for FirstCash

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$4.0b, and reported total annual CEO compensation of US$7.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.

As you can see, Rick Wessel is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean FirstCash, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at FirstCash has changed from year to year.

NasdaqGS:FCFS CEO Compensation, October 14th 2019
NasdaqGS:FCFS CEO Compensation, October 14th 2019

Is FirstCash, Inc. Growing?

Over the last three years FirstCash, Inc. has grown its earnings per share (EPS) by an average of 30% per year (using a line of best fit). Its revenue is up 2.2% over last year.

This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has FirstCash, Inc. Been A Good Investment?

Boasting a total shareholder return of 107% over three years, FirstCash, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We compared total CEO remuneration at FirstCash, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at FirstCash.

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.

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 editorial-team@simplywallst.com. 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.