Most Shareholders Will Probably Find That The CEO Compensation For Verra Mobility Corporation (NASDAQ:VRRM) Is Reasonable

Key Insights

• Verra Mobility's Annual General Meeting to take place on 20th of May
• Total pay for CEO David Roberts includes US$663.5k salary
• The total compensation is similar to the average for the industry
• Over the past three years, Verra Mobility's EPS fell by 17% and over the past three years, the total shareholder return was 51%

We've discovered 3 warning signs about Verra Mobility. View them for free.

Despite strong share price growth of 51% for Verra Mobility Corporation (NASDAQ:VRRM) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 20th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Verra Mobility

How Does Total Compensation For David Roberts Compare With Other Companies In The Industry?

Our data indicates that Verra Mobility Corporation has a market capitalization of US$3.9b, and total annual CEO compensation was reported as US$5.6m for the year to December 2024. We note that's a decrease of 40% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$663k.

In comparison with other companies in the American Professional Services industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$7.3m. From this we gather that David Roberts is paid around the median for CEOs in the industry. Furthermore, David Roberts directly owns US$23m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. There isn't a significant difference between Verra Mobility and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Verra Mobility Corporation's Growth Numbers

Over the last three years, Verra Mobility Corporation has shrunk its earnings per share by 17% per year. In the last year, its revenue is up 6.9%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Verra Mobility Corporation Been A Good Investment?

Boasting a total shareholder return of 51% over three years, Verra Mobility Corporation 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Verra Mobility that you should be aware of before investing.

Switching gears from Verra Mobility, 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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.