We Think Altisource Portfolio Solutions S.A.'s (NASDAQ:ASPS) CEO Compensation Package Needs To Be Put Under A Microscope

The results at Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) have been quite disappointing recently and CEO Bill Shepro bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 18 May 2021. 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. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Altisource Portfolio Solutions

Comparing Altisource Portfolio Solutions S.A.'s CEO Compensation With the industry

At the time of writing, our data shows that Altisource Portfolio Solutions S.A. has a market capitalization of US$99m, and reported total annual CEO compensation of US$2.8m for the year to December 2020. We note that's a decrease of 51% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$669k.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$321k. This suggests that Bill Shepro is paid more than the median for the industry. Moreover, Bill Shepro also holds US$3.2m worth of Altisource Portfolio Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$669k	US$819k	24%
Other	US$2.2m	US$4.9m	76%
Total Compensation	US$2.8m	US$5.8m	100%

Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Altisource Portfolio Solutions pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Altisource Portfolio Solutions S.A.'s Growth

Over the last three years, Altisource Portfolio Solutions S.A. has shrunk its earnings per share by 101% per year. In the last year, its revenue is down 51%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Altisource Portfolio Solutions S.A. Been A Good Investment?

With a total shareholder return of -78% over three years, Altisource Portfolio Solutions S.A. shareholders would by and large be disappointed. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Altisource Portfolio Solutions you should be aware of, and 1 of them is significant.

Important note: Altisource Portfolio Solutions 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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This article by Simply Wall St is general in nature. 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.
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