Here's Why Shareholders May Want To Be Cautious With Increasing Reliance Global Group, Inc.'s (NASDAQ:RELI) CEO Pay Packet

Key Insights

• Reliance Global Group to hold its Annual General Meeting on 31st of December
• Salary of US$338.9k is part of CEO Ezra Beyman's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Reliance Global Group's EPS grew by 56% and over the past three years, the total loss to shareholders 100%

Shareholders of Reliance Global Group, Inc. (NASDAQ:RELI) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 31st of December. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Reliance Global Group

How Does Total Compensation For Ezra Beyman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Reliance Global Group, Inc. has a market capitalization of US$2.1m, and reported total annual CEO compensation of US$445k for the year to December 2023. Notably, that's a decrease of 27% over the year before. In particular, the salary of US$338.9k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the American Insurance industry with market capitalizations below US$200m, reported a median total CEO compensation of US$570k. This suggests that Reliance Global Group remunerates its CEO largely in line with the industry average. Furthermore, Ezra Beyman directly owns US$135k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$339k	US$300k	76%
Other	US$106k	US$306k	24%
Total Compensation	US$445k	US$606k	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Reliance Global Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Reliance Global Group, Inc.'s Growth

Reliance Global Group, Inc. has seen its earnings per share (EPS) increase by 56% a year over the past three years. In the last year, its revenue is up 4.7%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Reliance Global Group, Inc. Been A Good Investment?

Few Reliance Global Group, Inc. shareholders would feel satisfied with the return of -100% over three years. 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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. 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 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 5 warning signs for Reliance Global Group that investors should be aware of in a dynamic business environment.

Important note: Reliance Global 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.

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.