Here's Why Shareholders Will Not Be Complaining About OneMain Holdings, Inc.'s (NYSE:OMF) CEO Pay Packet

By
Simply Wall St
Published
May 18, 2021
NYSE:OMF
Source: Shutterstock

It would be hard to discount the role that CEO Doug Shulman has played in delivering the impressive results at OneMain Holdings, Inc. (NYSE:OMF) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 25 May 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for OneMain Holdings

How Does Total Compensation For Doug Shulman Compare With Other Companies In The Industry?

According to our data, OneMain Holdings, Inc. has a market capitalization of US$7.3b, and paid its CEO total annual compensation worth US$9.4m over the year to December 2020. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$800k.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$8.8m. From this we gather that Doug Shulman is paid around the median for CEOs in the industry. Furthermore, Doug Shulman directly owns US$5.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$800k US$800k 9%
Other US$8.6m US$8.7m 91%
Total CompensationUS$9.4m US$9.5m100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. It's interesting to note that OneMain Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:OMF CEO Compensation May 19th 2021

A Look at OneMain Holdings, Inc.'s Growth Numbers

OneMain Holdings, Inc. has seen its earnings per share (EPS) increase by 60% a year over the past three years. It achieved revenue growth of 22% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 OneMain Holdings, Inc. Been A Good Investment?

Most shareholders would probably be pleased with OneMain Holdings, Inc. for providing a total return of 119% over three years. 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.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for OneMain Holdings (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: OneMain Holdings 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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