A Quick Analysis On PRA Group's (NASDAQ:PRAA) CEO Salary

Kevin Stevenson became the CEO of PRA Group, Inc. (NASDAQ:PRAA) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for PRA Group.

View our latest analysis for PRA Group

How Does Total Compensation For Kevin Stevenson Compare With Other Companies In The Industry?

According to our data, PRA Group, Inc. has a market capitalization of US$2.0b, and paid its CEO total annual compensation worth US$4.7m over the year to December 2019. Notably, that's an increase of 20% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$900k.

On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$3.4m. Hence, we can conclude that Kevin Stevenson is remunerated higher than the industry median. What's more, Kevin Stevenson holds US$10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. According to our research, PRA Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

PRA Group, Inc.'s Growth

PRA Group, Inc.'s earnings per share (EPS) grew 37% per year over the last three years. In the last year, its revenue is up 7.7%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 PRA Group, Inc. Been A Good Investment?

PRA Group, Inc. has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, PRA Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed us with its EPS growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

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 PRA Group that investors should think about before committing capital to this stock.

Important note: PRA 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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