PROG Holdings, Inc.'s (NYSE:PRG) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• PROG Holdings' Annual General Meeting to take place on 7th of May
• Total pay for CEO Steve Michaels includes US$1.00m salary
• The overall pay is 232% above the industry average
• PROG Holdings' EPS grew by 20% over the past three years while total shareholder loss over the past three years was 7.0%

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

In the past three years, shareholders of PROG Holdings, Inc. (NYSE:PRG) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 7th of May could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for PROG Holdings

How Does Total Compensation For Steve Michaels Compare With Other Companies In The Industry?

According to our data, PROG Holdings, Inc. has a market capitalization of US$1.1b, and paid its CEO total annual compensation worth US$13m over the year to December 2024. That's a notable increase of 45% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

On examining similar-sized companies in the American Consumer Finance industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$4.0m. Accordingly, our analysis reveals that PROG Holdings, Inc. pays Steve Michaels north of the industry median. What's more, Steve Michaels holds US$6.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.0m	US$975k	8%
Other	US$12m	US$8.2m	92%
Total Compensation	US$13m	US$9.2m	100%

On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. In PROG Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

PROG Holdings, Inc.'s Growth

Over the past three years, PROG Holdings, Inc. has seen its earnings per share (EPS) grow by 20% per year. It achieved revenue growth of 4.6% over the last year.

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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has PROG Holdings, Inc. Been A Good Investment?

Given the total shareholder loss of 7.0% over three years, many shareholders in PROG Holdings, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for PROG Holdings (1 can't be ignored!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.