This Is Why World Acceptance Corporation's (NASDAQ:WRLD) CEO Compensation Looks Appropriate

Key Insights

• World Acceptance's Annual General Meeting to take place on 21st of August
• Total pay for CEO Ravin Prashad includes US$840.0k salary
• Total compensation is 70% below industry average
• World Acceptance's EPS grew by 0.4% over the past three years while total shareholder loss over the past three years was 42%

Shareholders may be wondering what CEO Ravin Prashad plans to do to improve the less than great performance at World Acceptance Corporation (NASDAQ:WRLD) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 21st of August. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for World Acceptance

Comparing World Acceptance Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that World Acceptance Corporation has a market capitalization of US$583m, and reported total annual CEO compensation of US$966k for the year to March 2024. That is, the compensation was roughly the same as last year. In particular, the salary of US$840.0k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the American Consumer Finance industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$3.3m. That is to say, Ravin Prashad is paid under the industry median. Moreover, Ravin Prashad also holds US$13m worth of World Acceptance 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$840k	US$840k	87%
Other	US$126k	US$117k	13%
Total Compensation	US$966k	US$957k	100%

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. World Acceptance pays out 87% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at World Acceptance Corporation's Growth Numbers

World Acceptance Corporation saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is down 5.9%.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has World Acceptance Corporation Been A Good Investment?

The return of -42% over three years would not have pleased World Acceptance Corporation shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. The disappointing performance may have something to do with the flat earnings growth. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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've identified 1 warning sign for World Acceptance that investors should be aware of in a dynamic business environment.

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.