Here's Why Some Shareholders May Not Be Too Generous With RCI Hospitality Holdings, Inc.'s (NASDAQ:RICK) CEO Compensation This Year

Key Insights

• RCI Hospitality Holdings' Annual General Meeting to take place on 18th of August
• CEO Eric Langan's total compensation includes salary of US$1.70m
• The total compensation is 33% less than the average for the industry
• RCI Hospitality Holdings' three-year loss to shareholders was 49% while its EPS was down 40% over the past three years

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The disappointing performance at RCI Hospitality Holdings, Inc. (NASDAQ:RICK) will make some shareholders rather disheartened. The next AGM coming up on 18th of August will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. The data we gathered below shows that CEO compensation looks acceptable for now.

See our latest analysis for RCI Hospitality Holdings

How Does Total Compensation For Eric Langan Compare With Other Companies In The Industry?

At the time of writing, our data shows that RCI Hospitality Holdings, Inc. has a market capitalization of US$307m, and reported total annual CEO compensation of US$1.8m for the year to September 2024. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at US$1.70m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the American Hospitality industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.7m. That is to say, Eric Langan is paid under the industry median. Furthermore, Eric Langan directly owns US$25m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that RCI Hospitality Holdings pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

RCI Hospitality Holdings, Inc.'s Growth

RCI Hospitality Holdings, Inc. has reduced its earnings per share by 40% a year over the last three years. In the last year, its revenue is down 3.9%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has RCI Hospitality Holdings, Inc. Been A Good Investment?

With a total shareholder return of -49% over three years, RCI Hospitality Holdings, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for RCI Hospitality Holdings that investors should look into moving forward.

Switching gears from RCI Hospitality Holdings, 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.