RumbleON, Inc.'s (NASDAQ:RMBL) CEO Compensation Looks Acceptable To Us And Here's Why

Performance at RumbleON, Inc. (NASDAQ:RMBL) has been rather uninspiring recently and shareholders may be wondering how CEO Marshall Chesrown plans to fix this. At the next AGM coming up on 18 November 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for RumbleON

Comparing RumbleON, Inc.'s CEO Compensation With the industry

According to our data, RumbleON, Inc. has a market capitalization of US$665m, and paid its CEO total annual compensation worth US$851k over the year to December 2020. We note that's an increase of 52% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$367k.

In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$2.8m. In other words, RumbleON pays its CEO lower than the industry median. Furthermore, Marshall Chesrown directly owns US$10m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$367k	US$360k	43%
Other	US$484k	US$200k	57%
Total Compensation	US$851k	US$560k	100%

On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. RumbleON pays out 43% 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.

RumbleON, Inc.'s Growth

RumbleON, Inc.'s earnings per share (EPS) grew 33% per year over the last three years. Its revenue is down 20% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has RumbleON, Inc. Been A Good Investment?

Few RumbleON, Inc. shareholders would feel satisfied with the return of -59% over three years. 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 is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for RumbleON that investors should look into moving forward.

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.

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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