Here's Why Shareholders May Want To Be Cautious With Increasing Enova International, Inc.'s (NYSE:ENVA) CEO Pay Packet

Key Insights

• Enova International will host its Annual General Meeting on 8th of May
• Total pay for CEO David Fisher includes US$956.7k salary
• The overall pay is 34% above the industry average
• Over the past three years, Enova International's EPS fell by 22% and over the past three years, the total shareholder return was 74%

The share price of Enova International, Inc. (NYSE:ENVA) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 8th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Enova International

Comparing Enova International, Inc.'s CEO Compensation With The Industry

Our data indicates that Enova International, Inc. has a market capitalization of US$1.6b, and total annual CEO compensation was reported as US$9.9m for the year to December 2023. That's just a smallish increase of 6.4% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$957k.

In comparison with other companies in the American Consumer Finance industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$7.4m. Accordingly, our analysis reveals that Enova International, Inc. pays David Fisher north of the industry median. Moreover, David Fisher also holds US$16m worth of Enova International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$957k	US$926k	10%
Other	US$8.9m	US$8.4m	90%
Total Compensation	US$9.9m	US$9.3m	100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. It's interesting to note that Enova International allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Enova International, Inc.'s Growth

Over the last three years, Enova International, Inc. has shrunk its earnings per share by 22% per year. In the last year, its revenue is up 7.5%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Enova International, Inc. Been A Good Investment?

Boasting a total shareholder return of 74% over three years, Enova International, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

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 2 warning signs for Enova International 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.