The performance at B. Riley Financial, Inc. (NASDAQ:RILY) has been quite strong recently and CEO Bryant Riley has played a role in it. Coming up to the next AGM on 27 May 2021, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.
View our latest analysis for B. Riley Financial
Comparing B. Riley Financial, Inc.’s CEO Compensation With the industry
Our data indicates that B. Riley Financial, Inc. has a market capitalization of US$2.0b, and total annual CEO compensation was reported as US$3.7m for the year to December 2020. Notably, that’s a decrease of 24% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$600k.
On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$3.7m. From this we gather that Bryant Riley is paid around the median for CEOs in the industry. Furthermore, Bryant Riley directly owns US$380m worth of shares in the company, implying that they are deeply invested in the company’s success.
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. B. Riley Financial is paying a higher share of its remuneration through a salary in comparison to the overall industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
NasdaqGM:RILY CEO Compensation May 22nd 2021
B. Riley Financial, Inc.’s Growth
B. Riley Financial, Inc.’s earnings per share (EPS) grew 540% per year over the last three years. Its revenue is up 228% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has B. Riley Financial, Inc. Been A Good Investment?
We think that the total shareholder return of 340%, over three years, would leave most B. Riley Financial, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company’s key performance areas. We identified 5 warning signs for B. Riley Financial (2 are a bit unpleasant!) that you should be aware of before investing here.
Important note: B. Riley Financial 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.
If you’re looking to trade B. Riley Financial, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.