This Is Why Shareholders May Want To Hold Back On A Pay Rise For Revolve Group, Inc.'s (NYSE:RVLV) CEO

Key Insights

• Revolve Group to hold its Annual General Meeting on 7th of June
• Total pay for CEO Mike Karanikolas includes US$451.2k salary
• The overall pay is 87% below the industry average
• Revolve Group's three-year loss to shareholders was 66% while its EPS was down 31% over the past three years

The disappointing performance at Revolve Group, Inc. (NYSE:RVLV) will make some shareholders rather disheartened. At the upcoming AGM on 7th of June, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

Check out our latest analysis for Revolve Group

Comparing Revolve Group, Inc.'s CEO Compensation With The Industry

Our data indicates that Revolve Group, Inc. has a market capitalization of US$1.3b, and total annual CEO compensation was reported as US$981k for the year to December 2023. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$451k.

For comparison, other companies in the American Specialty Retail industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$7.7m. In other words, Revolve Group pays its CEO lower than the industry median. Moreover, Mike Karanikolas also holds US$2.3m worth of Revolve Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$451k	US$451k	46%
Other	US$529k	US$533k	54%
Total Compensation	US$981k	US$984k	100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. It's interesting to note that Revolve Group pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Revolve Group, Inc.'s Growth Numbers

Over the last three years, Revolve Group, Inc. has shrunk its earnings per share by 31% per year. It saw its revenue drop 3.4% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Revolve Group, Inc. Been A Good Investment?

The return of -66% over three years would not have pleased Revolve Group, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Revolve Group 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.

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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.