Shareholders May Be A Bit More Conservative With Remark Holdings, Inc.'s (NASDAQ:MARK) CEO Compensation For Now

The underwhelming share price performance of Remark Holdings, Inc. (NASDAQ:MARK) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 23 August 2021. 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.

See our latest analysis for Remark Holdings

How Does Total Compensation For Kai-Shing Tao Compare With Other Companies In The Industry?

Our data indicates that Remark Holdings, Inc. has a market capitalization of US$114m, and total annual CEO compensation was reported as US$350k for the year to December 2020. This was the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$350k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$391k. From this we gather that Kai-Shing Tao is paid around the median for CEOs in the industry. What's more, Kai-Shing Tao holds US$6.2m 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$350k	US$350k	100%
Other	-	-	-
Total Compensation	US$350k	US$350k	100%

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. On a company level, Remark Holdings prefers to reward its CEO through a salary, opting not to pay Kai-Shing Tao through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Remark Holdings, Inc.'s Growth

Remark Holdings, Inc. has seen its earnings per share (EPS) increase by 105% a year over the past three years. In the last year, its revenue is up 233%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Remark Holdings, Inc. Been A Good Investment?

Few Remark Holdings, Inc. shareholders would feel satisfied with the return of -69% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Remark Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 4 warning signs for Remark Holdings you should be aware of, and 2 of them make us uncomfortable.

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.

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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.
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