Assaf Ran became the CEO of Manhattan Bridge Capital, Inc. (NASDAQ:LOAN) in 1989, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Manhattan Bridge Capital pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Manhattan Bridge Capital, Inc.'s CEO Compensation With the industry
According to our data, Manhattan Bridge Capital, Inc. has a market capitalization of US$40m, and paid its CEO total annual compensation worth US$262k over the year to December 2019. That's a notable decrease of 33% on last year. Notably, the salary which is US$254.2k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$237k. From this we gather that Assaf Ran is paid around the median for CEOs in the industry. Furthermore, Assaf Ran directly owns US$11m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 13% of total compensation out of all the companies we analyzed, while other remuneration made up 87% of the pie. Investors will find it interesting that Manhattan Bridge Capital pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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.
Manhattan Bridge Capital, Inc.'s Growth
Manhattan Bridge Capital, Inc. has seen its earnings per share (EPS) increase by 4.0% a year over the past three years. In the last year, its revenue is down 2.4%.
We generally like to see a little revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Manhattan Bridge Capital, Inc. Been A Good Investment?
With a three year total loss of 11% for the shareholders, Manhattan Bridge Capital, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
Manhattan Bridge Capital pays its CEO a majority of compensation through a salary. As we noted earlier, Manhattan Bridge Capital pays its CEO in line with similar-sized companies belonging to the same industry. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Manhattan Bridge Capital (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
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. 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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