- Heritage Global has compensation arrangements in place that are far in excess of peers and out of place in context of their revenue generation/market cap.
- Heritage Global's pay structure does not appropriately align the incentives of management with the interest of shareholders, in my view.
- Bringing compensation down into more reasonable bounds would immediately result in significantly increased EPS and likely also a resulting jump in HGBL stock price.
- More reasonable compensation packages will also increase retained earnings, which can then be used in higher margin activities that require a lot of capital.
- Activist pressure may be needed to instigate needed change.
For further details see:
Executive Compensation Excesses At Heritage Global