Key Insights

• Velocity Financial will host its Annual General Meeting on 17th of May
• Salary of US$630.0k is part of CEO Chris Farrar's total remuneration
• The overall pay is 143% above the industry average
• Velocity Financial's total shareholder return over the past three years was 67% while its EPS grew by 47% over the past three years

Under the guidance of CEO Chris Farrar, Velocity Financial, Inc. (NYSE:VEL) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 17th of May. However, some shareholders may still want to keep CEO compensation within reason.

How Does Total Compensation For Chris Farrar Compare With Other Companies In The Industry?

Our data indicates that Velocity Financial, Inc. has a market capitalization of US$599m, and total annual CEO compensation was reported as US$3.9m for the year to December 2023. We note that's an increase of 29% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$630k.

On examining similar-sized companies in the American Diversified Financial industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.6m. This suggests that Chris Farrar is paid more than the median for the industry. What's more, Chris Farrar holds US$9.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Velocity Financial is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Velocity Financial, Inc.'s Growth

Over the past three years, Velocity Financial, Inc. has seen its earnings per share (EPS) grow by 47% per year. Its revenue is up 28% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Velocity Financial, Inc. Been A Good Investment?

Boasting a total shareholder return of 67% over three years, Velocity Financial, Inc. has done well by shareholders. 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.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Velocity Financial that investors should look into moving forward.

Important note: Velocity 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.

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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.