Shareholders May Be Wary Of Increasing Reading International, Inc.'s (NASDAQ:RDI) CEO Compensation Package

Shareholders will probably not be too impressed with the underwhelming results at Reading International, Inc. (NASDAQ:RDI) recently. At the upcoming AGM on 08 December 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Reading International

How Does Total Compensation For Ellen Cotter Compare With Other Companies In The Industry?

According to our data, Reading International, Inc. has a market capitalization of US$124m, and paid its CEO total annual compensation worth US$1.2m over the year to December 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$550k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$239k. This suggests that Ellen Cotter is paid more than the median for the industry. What's more, Ellen Cotter holds US$3.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$550k	US$551k	45%
Other	US$670k	US$641k	55%
Total Compensation	US$1.2m	US$1.2m	100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. Reading International pays out 45% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Reading International, Inc.'s Growth

Over the last three years, Reading International, Inc. has shrunk its earnings per share by 3.9% per year. In the last year, its revenue is down 21%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Reading International, Inc. Been A Good Investment?

Few Reading International, Inc. shareholders would feel satisfied with the return of -73% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Reading International (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Reading International, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.