We Think Some Shareholders May Hesitate To Increase Ark Restaurants Corp.'s (NASDAQ:ARKR) CEO Compensation

Key Insights

• Ark Restaurants' Annual General Meeting to take place on 14th of March
• Total pay for CEO Michael Weinstein includes US$1.05m salary
• The overall pay is 83% above the industry average
• Over the past three years, Ark Restaurants' EPS grew by 26% and over the past three years, the total shareholder return was 13%

CEO Michael Weinstein has done a decent job of delivering relatively good performance at Ark Restaurants Corp. (NASDAQ:ARKR) recently. As shareholders go into the upcoming AGM on 14th of March, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Ark Restaurants

How Does Total Compensation For Michael Weinstein Compare With Other Companies In The Industry?

According to our data, Ark Restaurants Corp. has a market capitalization of US$69m, and paid its CEO total annual compensation worth US$1.2m over the year to October 2022. That's a notable increase of 36% on last year. Notably, the salary which is US$1.05m, represents most of the total compensation being paid.

On comparing similar-sized companies in the American Hospitality industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$643k. This suggests that Michael Weinstein is paid more than the median for the industry. Moreover, Michael Weinstein also holds US$18m worth of Ark Restaurants stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	US$1.1m	US$819k	89%
Other	US$125k	US$50k	11%
Total Compensation	US$1.2m	US$869k	100%

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. According to our research, Ark Restaurants has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Ark Restaurants Corp.'s Growth Numbers

Over the past three years, Ark Restaurants Corp. has seen its earnings per share (EPS) grow by 26% per year. Its revenue is up 21% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Ark Restaurants Corp. Been A Good Investment?

Ark Restaurants Corp. has generated a total shareholder return of 13% 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.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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. We did our research and spotted 4 warning signs for Ark Restaurants that investors should look into moving forward.

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.

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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.