Cars.com Inc.'s (NYSE:CARS) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Cars.com to hold its Annual General Meeting on 4th of June
• CEO T. Vetter's total compensation includes salary of US$750.0k
• The overall pay is comparable to the industry average
• Over the past three years, Cars.com's EPS grew by 72% and over the past three years, the total loss to shareholders 0.3%

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As many shareholders of Cars.com Inc. (NYSE:CARS) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 4th of June. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Cars.com

How Does Total Compensation For T. Vetter Compare With Other Companies In The Industry?

At the time of writing, our data shows that Cars.com Inc. has a market capitalization of US$645m, and reported total annual CEO compensation of US$9.5m for the year to December 2024. We note that's an increase of 33% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$750k.

For comparison, other companies in the American Interactive Media and Services industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$8.0m. From this we gather that T. Vetter is paid around the median for CEOs in the industry. What's more, T. Vetter holds US$4.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. In Cars.com's case, non-salary compensation represents a greater slice of total remuneration, 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.

Cars.com Inc.'s Growth

Cars.com Inc.'s earnings per share (EPS) grew 72% per year over the last three years. It achieved revenue growth of 2.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Cars.com Inc. Been A Good Investment?

With a three year total loss of 0.3% for the shareholders, Cars.com Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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 pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Cars.com (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Cars.com, 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.