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Here's Why Some Shareholders May Not Be Too Generous With Revolve Group, Inc.'s (NYSE:RVLV) CEO Compensation This Year

Key Insights

  • Revolve Group's Annual General Meeting to take place 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 underwhelming performance at Revolve Group, Inc. (NYSE:RVLV) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 7th of June. The data we gathered below shows that CEO compensation looks acceptable 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 we always look at total compensation first, our analysis shows that the salary component is less, at US$451k.

On comparing similar companies from the American Specialty Retail industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$7.7m. That is to say, Mike Karanikolas is paid under the industry median. What's more, Mike Karanikolas holds US$2.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2023

2022

Proportion (2023)

Salary

US$451k

US$451k

46%

Other

US$529k

US$533k

54%

Total Compensation

US$981k

US$984k

100%

Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. It's interesting to note that Revolve Group pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Revolve Group, Inc.'s Growth

Over the last three years, Revolve Group, Inc. has shrunk its earnings per share by 31% per year. Its revenue is down 3.4% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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?

With a total shareholder return of -66% over three years, Revolve Group, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.