Regional Management Corp. announces executive compensation plans

Published 19/03/2025, 21:36
Regional Management Corp. announces executive compensation plans

Regional Management Corp . (NYSE:RM), a personal credit institution with a market capitalization of $301.5 million and a "GOOD" financial health rating according to InvestingPro, disclosed new compensatory arrangements for its executive officers, following a recent meeting of its Board of Directors. On Monday, the company’s Human Resources and Compensation Committee, in consultation with an independent compensation consultant, approved a series of awards under the 2024 Long-Term Incentive Plan.

The awards, granted to the named executive officers (NEOs), include performance restricted stock units (PRSUs), restricted stock, and restricted stock units (RSUs). The PRSUs are tied to the company’s total shareholder return relative to a comparator group and pre-provision return on assets from the grant date through December 31, 2027. The earned PRSUs will be subject to a further one-year holding period post-vesting.

The grant values for PRSUs are significant, with CEO Mr. Beck receiving a grant valued at $1.5 million. Other executives, such as Ms. Rana, Mr. Fisher, Mr. Parmar, and Ms. Atwood, were granted PRSUs valued between $167,500 and $495,000. The actual number of PRSUs that may vest can range from 0% to 170% of the target based on performance criteria.

Additionally, restricted stock and RSUs were granted with vesting schedules spanning over three years, contingent on continued employment. Mr. Beck exclusively received RSUs valued at $1.5 million, with one-third vesting annually from December 31, 2025, through December 31, 2027.

These compensation arrangements aim to align the interests of the executives with those of the shareholders by tying a portion of their compensation to the company’s financial and stock performance. The company has demonstrated strong performance with a 32.9% return over the past year, while maintaining healthy liquidity with a current ratio of 3.47. The details of these awards were outlined in the company’s SEC Form 8-K filed on Wednesday.

This move reflects Regional Management Corp.’s strategy to incentivize its top management through performance-based equity awards, which is a common practice in corporate governance to foster long-term value creation for shareholders. Trading at a P/E ratio of 7.11, InvestingPro analysis suggests the stock is currently undervalued. The company, headquartered in Greer, South Carolina, operates under the personal credit industry classified by the standard industrial classification code 6141. For deeper insights into RM’s valuation and growth potential, including additional ProTips and comprehensive financial analysis, visit InvestingPro.

In other recent news, Regional Management Corp reported fourth-quarter 2025 financial results that exceeded analyst expectations. The company expressed confidence in increasing its bottom line by more than 30% in 2025, despite the challenges posed by the anticipated portfolio expansion requiring upfront credit loss reserves. Keefe, Bruyette & Woods (KBW) responded to these results by raising their price target for Regional Management from $33.00 to $38.00, while maintaining a Market Perform rating. Analyst Sanjay Sakhrani of KBW noted adjustments in earnings per share estimates for 2025 and 2026, reducing them to $5.03 and $6.50, respectively, due to expected higher expenses and provisions for loan growth. The revised price target is based on a 6x price-to-earnings multiple applied to the 2026 EPS estimate. Regional Management’s strategic barbell approach to growth has yielded favorable outcomes, although credit metrics remain elevated. KBW’s decision to maintain a Market Perform rating reflects a cautious stance as analysts look for a more favorable investment entry point.

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