Here's Why Shareholders May Want To Be Cautious With Increasing The ONE Group Hospitality, Inc.'s (NASDAQ:STKS) CEO Pay Packet

Key Insights

• ONE Group Hospitality will host its Annual General Meeting on 20th of May
• Salary of US$700.0k is part of CEO Manny Hilario's total remuneration
• The overall pay is 190% above the industry average
• ONE Group Hospitality's three-year loss to shareholders was 49% while its EPS was down 125% over the past three years

Our free stock report includes 1 warning sign investors should be aware of before investing in ONE Group Hospitality. Read for free now.

Shareholders of The ONE Group Hospitality, Inc. (NASDAQ:STKS) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 20th of May and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for ONE Group Hospitality

How Does Total Compensation For Manny Hilario Compare With Other Companies In The Industry?

Our data indicates that The ONE Group Hospitality, Inc. has a market capitalization of US$120m, and total annual CEO compensation was reported as US$1.6m for the year to December 2024. Notably, that's an increase of 11% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$700k.

For comparison, other companies in the American Hospitality industry with market capitalizations below US$200m, reported a median total CEO compensation of US$550k. Hence, we can conclude that Manny Hilario is remunerated higher than the industry median. Moreover, Manny Hilario also holds US$5.0m worth of ONE Group Hospitality stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$700k	US$700k	44%
Other	US$895k	US$737k	56%
Total Compensation	US$1.6m	US$1.4m	100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. ONE Group Hospitality is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

The ONE Group Hospitality, Inc.'s Growth

Over the last three years, The ONE Group Hospitality, Inc. has shrunk its earnings per share by 125% per year. In the last year, its revenue is up 139%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has The ONE Group Hospitality, Inc. Been A Good Investment?

Few The ONE Group Hospitality, Inc. shareholders would feel satisfied with the return of -49% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for ONE Group Hospitality that investors should think about before committing capital to this stock.

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.