Danny Bharwani
CONSUMER PORTFOLIO SERVICESAbout Danny Bharwani
Danny “Denesh” Bharwani, 57, is Executive Vice President – Finance and Chief Financial Officer of Consumer Portfolio Services, Inc. (CPS). He became CFO in September 2022, after serving as SVP Finance (2016–2022), VP Finance (2002–2016), and Assistant Controller (1997) at CPS; prior to CPS he was Assistant Controller at The Todd‑AO Corporation (1989–1997) . During his CFO tenure, CPS revenue grew from $329.7 million in 2022 to $393.5 million in 2024 while diluted EPS declined from $3.23 (2022) to $0.79 (2024), reflecting margin pressure from higher interest expense and credit dynamics . Over 2019–2024, CPS cumulative TSR rose to $322.26 from an initial $100, outperforming the Nasdaq OMX Financial Services Index ($187.92), indicating strong long‑term value creation despite recent earnings normalization .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Consumer Portfolio Services (CPS) | Chief Financial Officer; Executive Vice President – Finance | Sep 2022–present (CFO); EVP since Dec 2022 | Finance leadership and oversight of capital markets |
| Consumer Portfolio Services (CPS) | Senior Vice President – Finance | Apr 2016–Dec 2022 | Finance, planning, treasury responsibilities |
| Consumer Portfolio Services (CPS) | Vice President – Finance | Jun 2002–Apr 2016 | Finance management and scaling with portfolio growth |
| Consumer Portfolio Services (CPS) | Assistant Controller | Aug 1997–Jun 2002 | Accounting control foundation and internal processes |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Todd‑AO Corporation | Assistant Controller | 1989–1997 | Film/audio post‑production finance and accounting |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 331,000 | 371,000 | 386,000 |
| Target Bonus Max (% of Base) | 110% (as SVP) | 140% (as EVP) | 140% (as EVP) |
| Actual Non‑Equity Incentive ($) | 324,000 | 385,655 | 444,929 |
| All Other Compensation ($) | 351 | 342 | 44,871 (incl. vacation cash‑out $22,269 and car allowance $20,260) |
| Total Compensation ($) | 954,151 | 756,997 | 875,800 |
Notes
- FY2024 bonus amounts were earned in 2024 and approved/paid in 2025 per Item 5.02(f) 8‑K .
- Perquisites include group life insurance and defined contribution match ($2,000), vacation cash‑outs, car allowance .
Performance Compensation
Annual Incentive Plan (Executive Management Bonus Plan – EVP Structure)
| Year | Metric | Weighting | Base Salary ($) | Creditable % of Base | Payout ($) | Payment Timing |
|---|---|---|---|---|---|---|
| 2024 | Skills & performance | 35% | 386,000 | 115.27% | 445,000 | Paid/approved in 2025 |
| 2024 | Individual objective | 14% | 386,000 | 115.27% | 445,000 | Paid/approved in 2025 |
| 2024 | Department subjective | 42% | 386,000 | 115.27% | 445,000 | Paid/approved in 2025 |
| 2024 | Company performance | 28% | 386,000 | 115.27% | 445,000 | Paid/approved in 2025 |
| 2024 | CEO discretionary | 21% | 386,000 | 115.27% | 445,000 | Paid/approved in 2025 |
| 2023 | Skills & performance | 42% | 371,000 | 103.95% | 386,000 | Paid April 2024 |
| 2023 | Individual objective | 14% | 371,000 | 103.95% | 386,000 | Paid April 2024 |
| 2023 | Department subjective | 49% | 371,000 | 103.95% | 386,000 | Paid April 2024 |
| 2023 | CEO discretionary | 35% | 371,000 | 103.95% | 386,000 | Paid April 2024 |
| 2022 | SVP Plan weights (skills, objectives, company budget, department, discretionary) | 30%, 18%, 12%, 20%, 30% | 331,000 | 98% | 324,000 | Paid after FY2022 |
Notes
- EVP maximum payout is 140% of base (President 160%); SVP maximum 110% .
- No equity awards were granted in 2023 or 2024; long‑term incentives are predominantly stock options from prior grants .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 600,414 shares, representing 2.7% of outstanding shares as of the 10/23/2025 Record Date (22,071,046 outstanding) |
| Options – Exercisable | 255,000 options: 60,000 @ $3.48 (exp. 5/9/2025), 60,000 @ $3.53 (exp. 8/8/2026), 60,000 @ $2.47 (exp. 6/1/2027), 45,000 @ $4.95 (exp. 8/3/2028), 30,000 @ $10.25 (exp. 6/24/2029) |
| Options – Unexercisable | 45,000 options: 15,000 @ $4.95 (exp. 8/3/2028; vests 8/3/2025), 30,000 @ $10.25 (exp. 6/24/2029; vests half on 6/24/2025 and half on 6/24/2026) |
| Option Exercises (2024) | 60,000 shares exercised; value realized $255,000 |
| Option Exercises (2023) | 175,000 shares exercised; value realized $975,100 |
| Potential Change‑of‑Control Option Acceleration | $106,950 potential value from immediate vesting of unvested options (based on $10.86 closing price on 12/31/2024) |
| Hedging / Pledging | Hedging prohibited; pledging permitted. CEO has pledged 1,685,878 shares; no pledge disclosed for Bharwani |
| Stock Ownership Guidelines | No minimum stock ownership guidelines for executives |
Outstanding Equity Awards – Option Detail (as of 12/31/2024)
| Grant | Exercisable | Unexercisable | Strike ($) | Expiration |
|---|---|---|---|---|
| Legacy Grant | 60,000 | – | 3.48 | 5/9/2025 |
| Legacy Grant | 60,000 | – | 3.53 | 8/8/2026 |
| Legacy Grant | 60,000 | – | 2.47 | 6/1/2027 |
| 2018 Grant | 45,000 | 15,000 (vests 8/3/2025) | 4.95 | 8/3/2028 |
| 2022 Grant | 30,000 | 30,000 (vests 6/24/2025 & 6/24/2026) | 10.25 | 6/24/2029 |
Employment Terms
| Term | Provision |
|---|---|
| Employment Status | At‑will; no employment contract |
| Severance | No severance payments for termination events other than change‑of‑control option treatment |
| Change‑of‑Control Economics | Mandatory option acceleration upon certain CoC events (asset sale; merger where CPS holders <50% unless equivalent award or Qualifying Termination within one year; board turnover; >25% ownership acquisition without Board approval), with discretionary acceleration possible in other circumstances. Qualifying Termination defined (without cause or for good reason) |
| Clawback / Recoupment | Awards subject to company clawback/recoupment and applicable listing‑rule requirements |
| Non‑compete / Non‑solicit | Not disclosed in proxy; executives are at‑will; option post‑termination exercise windows apply (3 months standard; 12 months for disability/retirement/death) |
| Deferred Compensation | No special deferred compensation programs; executives participate in broad‑based 401(k) |
| Equity Plan (2025) | New 2025 Equity Incentive Plan proposed/approved with minimum one‑year vesting and governance features; share limit mechanics and overhang/burn rate disclosed |
Company Performance Context (during Bharwani’s CFO tenure)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($000) | 329,709 | 352,014 | 393,506 |
| Net Income ($000) | 85,983 | 45,343 | 19,203 |
| Diluted EPS ($) | 3.23 | 1.80 | 0.79 |
| TSR – $100 initial (cumulative) | 125.82 (2020) | 351.63 (2021) | 262.61 (2022) |
Key drivers in 2024 included 11.8% revenue growth from higher interest income and fair value marks, offset by a 30.4% rise in interest expense and higher operating costs; average loan portfolio balance increased 10.2% with flat 11.3% yield .
Compensation Structure Analysis
- Shift toward cash incentives: No equity grants to NEOs in 2023–2024; long‑term incentives remain legacy stock options; cash bonuses determined annually under EMB Plan .
- At‑risk pay calibration: EVP maximum 140% of base with multi‑factor scoring; Bharwani’s payouts tracked at 98% (2022 SVP), 103.95% (2023 EVP), and 115.27% (2024 EVP) of base .
- Governance posture: No executive ownership minimums; hedging prohibited; pledging permitted; clawback policy embedded in equity plan documents .
Risk Indicators & Red Flags
- Potential selling pressure: Upcoming option vesting tranches in 2025–2026 (15,000 on 8/3/2025; 30,000 split on 6/24/2025 and 6/24/2026) following significant exercises in 2023–2024 .
- Alignment risks: Company permits pledging; CEO’s substantial pledged shares noted; no pledge disclosed for Bharwani .
- Change‑of‑control sensitivity: Option acceleration mechanics create event‑driven value realizations ($106,950 for Bharwani based on 12/31/2024 price) .
Investment Implications
- Pay‑for‑performance alignment: Bharwani’s annual incentive outcomes increased with scorecard improvements (115% of base in 2024), but absence of RSUs/PSUs concentrates LT alignment in options; no equity grants in 2023–2024 reduces incremental retention hooks .
- Ownership and skin‑in‑the‑game: 2.7% beneficial stake plus 255,000 exercisable options and 45,000 unexercisable options provide significant exposure; upcoming vest dates may drive periodic liquidity events .
- Performance backdrop: Revenue growth and expanding portfolio contrast with EPS compression from higher funding costs; TSR remains strong cumulatively, but near‑term earnings pressure warrants monitoring of bonus scorecard weights tied to company performance and funding cost management .
- Governance watch‑items: Lack of executive ownership guidelines and permissive pledging policy are notable; clawback provisions are present in the equity plan, partially mitigating risk .