This article will reflect on the compensation paid to Doug Marohn who has served as CEO of Nicholas Financial, Inc. (NASDAQ:NICK) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Nicholas Financial

How Does Total Compensation For Doug Marohn Compare With Other Companies In The Industry?

According to our data, Nicholas Financial, Inc. has a market capitalization of US$64m, and paid its CEO total annual compensation worth US$637k over the year to March 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is US$350.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$1.5m. This suggests that Doug Marohn is paid below the industry median. Furthermore, Doug Marohn directly owns US$584k worth of shares in the company.

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Nicholas Financial pays out 55% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Nicholas Financial, Inc.'s Growth Numbers

Over the past three years, Nicholas Financial, Inc. has seen its earnings per share (EPS) grow by 46% per year. It achieved revenue growth of 3.8% 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Nicholas Financial, Inc. Been A Good Investment?

Given the total shareholder loss of 8.9% over three years, many shareholders in Nicholas Financial, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Nicholas Financial, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth over three years is certainly impressive. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But we believe shareholders would want to see healthier returns before the CEO gets a raise.