Shareholders May Not Be So Generous With Mr. Cooper Group Inc.'s (NASDAQ:COOP) CEO Compensation And Here's Why

CEO Jay Bray has done a decent job of delivering relatively good performance at Mr. Cooper Group Inc. (NASDAQ:COOP) recently. As shareholders go into the upcoming AGM on 13 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Mr. Cooper Group

Comparing Mr. Cooper Group Inc.'s CEO Compensation With the industry

According to our data, Mr. Cooper Group Inc. has a market capitalization of US$2.9b, and paid its CEO total annual compensation worth US$9.3m over the year to December 2020. That's a notable increase of 29% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.2m. Accordingly, our analysis reveals that Mr. Cooper Group Inc. pays Jay Bray north of the industry median. Moreover, Jay Bray also holds US$30m worth of Mr. Cooper Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$1.0m	US$1.0m	11%
Other	US$8.3m	US$6.2m	89%
Total Compensation	US$9.3m	US$7.2m	100%

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. It's interesting to note that Mr. Cooper Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Mr. Cooper Group Inc.'s Growth Numbers

Over the last three years, Mr. Cooper Group Inc. has shrunk its earnings per share by 23% per year. It achieved revenue growth of 83% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mr. Cooper Group Inc. Been A Good Investment?

Most shareholders would probably be pleased with Mr. Cooper Group Inc. for providing a total return of 98% over three years. 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.

To Conclude...

Although the company has performed relatively well, we still think there are some areas that could be improved. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Mr. Cooper Group (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Mr. Cooper Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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