Rakesh Sehgal
PRA GROUPAbout Rakesh Sehgal
PRA Group’s Executive Vice President and Chief Financial Officer since September 15, 2023; joined PRA in May 2022 as SVP, Head of Corporate Development. Age 52; B.A. in Accounting & Economics Management (Ohio Wesleyan) and MBA in Strategy & Management and Finance (Kellogg, Northwestern) . Company performance leveraged for pay-for-performance context: 2024 GAAP Net Income $71M vs $(83)M in 2023, Adjusted EBITDA $1,138M vs $1,007M, while 2024 TSR proxy measure shows $100 invested = $58 vs $72 in 2023 (peer index $142 in 2024) . 2024 say‑on‑pay approval exceeded 91%, and the pay program emphasizes variable, at‑risk compensation, stock ownership (3x salary for non‑CEO execs), clawback, and prohibitions on hedging/pledging .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| PRA Group | EVP & CFO | 2023–present | Finance leadership through turnaround; capital structure actions (notes issuance, facility amendments) considered in 2024 accomplishments/IR disclosures . |
| PRA Group | SVP, Head of Corporate Development | 2022–2023 | Corporate development leadership; internal succession to CFO . |
| GE / GE Capital | Managing Director, M&A (and prior roles) | 2013–2022 | Closed $50B+ of transactions; deep corporate finance and markets expertise . |
| Barclays Capital; Lehman Brothers | Investment Banking (Specialty Finance) | 2003–2013 | M&A and leveraged finance advisory to specialty finance and others . |
External Roles
- No external public company directorships disclosed for Mr. Sehgal in PRA Group’s executive officer biographies and related filings cited herein .
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base salary ($) | 432,492 | 500,000 | 2024 base held flat vs 2023 end‑setting; CFO role effective 9/15/2023 . |
| Target bonus ($) | 500,000 (target opportunity) | 500,000 | Target equals 100% of base for 2024. |
| Actual bonus paid ($) | 265,000 | 600,000 (120% of target) | Based on Net Income, Adjusted EBITDA and strategic objectives. |
| Other cash/perqs ($) | 29,451 | 13,800 (401k match) | 401(k) match capped; comprehensive physical exam benefit available to NEOs . |
Performance Compensation
Annual Bonus Plan – 2024 Design and Outcome
| Metric | Weight | Threshold | Target | Max | Actual Result | Payout vs Target |
|---|---|---|---|---|---|---|
| Net Income (as adjusted) ($M) | 50% | 56.8 | 71.0 | 88.75 | 75.0 | 125% |
| Adjusted EBITDA ($M) | 30% | 1,008 | 1,260 | 1,575 | 1,147 | 78% |
| Strategic objectives | 20% | — | — | — | Exceeded objectives (execution on low‑cost locations, seller relationships, funding access, innovation/customer insights) | 150% |
| Overall payout | — | — | — | — | Company/individual results combined per plan | 120% for Sehgal; $600,000 |
Notes: Net Income (as adjusted) and Adjusted EBITDA definitions per CD&A; strategic objectives focus on execution priorities .
Long‑Term Incentive Plan (LTIP)
- 2024 structure: 50% PSUs, 50% RSUs; PSUs over 3-year period with metrics Adjusted EBITDA, ROATE, and Relative TSR; RSUs vest ratably over 3 years .
- PSU payout curve (target shares earned): Adjusted EBITDA and ROATE from 0% (<80%) to 200% (≥125%); Relative TSR from 0% (below 30th percentile) to 200% (≥90th percentile) .
- 2024 grants to Sehgal: 15,804 PSUs ($400,000 grant-date value); 15,804 RSUs ($400,000); plus a one‑time retention RSU of 3,951 units ($100,000) vesting 3/7/2026 .
- Outstanding equity as of 12/31/2024 (unvested): RSUs 7,863 (5/15/2022), 2,010 (3/7/2023), 5,472 (9/15/2023), 15,804 (3/7/2024), and 3,951 (3/7/2024 retention); PSUs 3,014 (3/7/2023) and 15,804 (3/7/2024) .
- Options: PRA does not currently grant stock options; none outstanding for NEOs .
- Multi‑year performance context: 2022 LTIP PSUs paid at 23% of target (Adjusted Revenue 64%, Adjusted EBITDA 52%, Adjusted Net Income 0%, Corporate Development Revenue 0%, Stock Price Appreciation 0%) .
Equity Grants – Sehgal Detail (2024)
| Award | Grant date | Units | Grant value ($) | Vesting |
|---|---|---|---|---|
| RSU (annual) | 3/7/2024 | 15,804 | 399,999 | 1/3 per year over 3 years |
| PSU (annual; target) | 3/7/2024 | 15,804 | 454,839 | 3‑year performance period; cliff vest based on metrics |
| RSU (retention) | 3/7/2024 | 3,951 | 100,000 | 100% on 3/7/2026 |
Vesting/realizations in 2024: 3,740 shares vested for Sehgal, total value realized $84,078; includes 1,004 RSUs on 3/7/2024 ($24,789) and 2,736 RSUs on 9/15/2024 ($59,289) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 21,873 shares beneficially owned as of 4/21/2025; <1% of outstanding . |
| Unvested RSUs/PSUs at 12/31/2024 | RSUs: 7,863; 2,010; 5,472; 15,804; 3,951; PSUs (target): 3,014; 15,804 . |
| Market value of unvested awards | RSU/PSU values shown at $20.89 close on 12/31/2024 within table (e.g., RSU 15,804 = $330,146; PSU 15,804 = $330,146) . |
| Ownership guidelines | 3x base salary for executive officers; unvested RSUs count; PSUs do not; 5‑year compliance window; all NEOs compliant or within window for 2024 . |
| Hedging/pledging | Prohibited for directors/officers/employees . |
| Share pledging status | Company policy prohibits pledging; no pledging permitted . |
| Insider activity cadence | Routine vesting creates tax withholding transactions; one late Form 4 (9/26/2024) disclosed for Sehgal due to shares withheld for taxes on RSU vesting . |
Employment Terms
| Element | Key terms (Sehgal) |
|---|---|
| Plan type | Covered under the Executive Severance Plan (not an individual employment agreement) . |
| Severance (no CIC) | Cash severance: 1x base salary + 1x annual bonus target; 12 months COBRA; no excise tax gross‑ups . |
| Severance (CIC, double‑trigger) | 1.5x base salary + 1.5x annual bonus; 18 months COBRA; equity vests upon qualifying termination within 6 months before or 24 months after CIC; no gross‑ups . |
| Illustrative payout (12/31/2024) | No CIC: $1,031,280 total (salary $500,000; bonus $500,000; benefits $31,280). CIC: $2,673,268 total (salary $750,000; bonus $750,000; equity $1,126,347; benefits $46,921) . |
| Clawback | Policy compliant with SEC/Nasdaq rules; recover incentive comp after restatement . |
| Restrictive covenants | Company maintains strong restrictive covenants in employment/equity agreements . |
Compensation Structure Analysis
- Mix and at‑risk design: Significant variable pay via annual bonus (50/30/20 weighting) and 50/50 PSU/RSU LTIP; no stock options (reduces repricing risk) .
- Metric rigor and alignment: 2024 bonus applied objective financials (Net Income and Adjusted EBITDA) plus strategic execution; outcome 120% reflects over‑target NI, sub‑target EBITDA, and strong strategic progress .
- Long‑term alignment: 2022 LTIP PSUs paid 23%, evidencing downside sensitivity when multi‑year goals are missed; 2024 PSU design adds ROATE and Relative TSR alongside Adjusted EBITDA .
- Governance safeguards: Ownership guidelines, clawback, no hedging/pledging, no tax gross‑ups; say‑on‑pay 91%+ in 2024 .
- Peer benchmarking: Compensation targeted at peer median; 2024 peer group includes credit/fintech/financial services comparables (e.g., Credit Acceptance, Encore, Enova, Navient, Walker & Dunlop, World Acceptance) .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: over 91% in favor; Compensation Committee maintained program continuity into 2024 given support .
Expertise & Qualifications
- 25+ years in financial services with GE/GE Capital M&A leadership and prior investment banking experience; BA and MBA credentials aligned to corporate finance, strategy, and markets .
Work History & Career Trajectory
| Company | Role | Tenure | Notes |
|---|---|---|---|
| PRA Group | EVP & CFO | 2023–present | Appointed 9/15/2023 . |
| PRA Group | SVP, Head of Corporate Development | 2022–2023 | Joined in 5/2022 . |
| GE / GE Capital | Managing Director, M&A (and prior roles) | 2013–2022 | Closed $50B+ transactions . |
| Barclays Capital; Lehman Brothers | Investment Banking | 2003–2013 | Specialty finance M&A/leveraged finance . |
Equity Ownership & Vesting Schedule (Detail)
| Grant | Units | Status at 12/31/2024 | Noted vesting cadence |
|---|---|---|---|
| RSU 5/15/2022 | 7,863 | Unvested | 1/3 per year over 3 years . |
| RSU 3/7/2023 | 2,010 | Unvested | 1/3 per year . |
| PSU 3/7/2023 (target) | 3,014 | Unearned | 3‑year performance period . |
| RSU 9/15/2023 | 5,472 | Unvested | 1/3 per year . |
| RSU 3/7/2024 | 15,804 | Unvested | 1/3 per year (2025–2027) . |
| PSU 3/7/2024 (target) | 15,804 | Unearned | 3‑year performance; metrics: Adj. EBITDA, ROATE, Relative TSR . |
| RSU 3/7/2024 (retention) | 3,951 | Unvested | Single vesting on 3/7/2026 . |
Related Party Transactions and Risk Indicators
- Related party transactions: None in 2024 per policy and committee review .
- Anti‑hedging/pledging: Strict prohibitions in place .
- SEC reporting: One late Form 4 for a tax withholding transaction; otherwise 2024 Section 16 compliance reported .
- No stock option repricing; minimal perquisites; no tax gross‑ups .
Compensation Committee & Peer Group
- Committee chaired by Brett Paschke; independent consultant (Pearl Meyer) supports benchmarking, design, and disclosure .
- Target pay positioning around peer median; 2024 peer group includes Credit Acceptance, Encore Capital, Enova, Green Dot, LendingClub, MGIC, Navient, NMI Holdings, Onity (Ocwen), Regional Management, Walker & Dunlop, World Acceptance .
Investment Implications
- Pay‑for‑performance linkage is functioning: 2024 annual bonus at 120% reflects rebound in GAAP Net Income and strategic execution despite EBITDA shortfall; 2022 LTIP payout at 23% underscores downside accountability through the cycle .
- Alignment/retention: Material unvested RSUs/PSUs plus 2024 two‑year retention RSU (vests 3/7/2026) support continuity in the CFO seat during turnaround; equity guidelines (3x salary), clawback, and anti‑hedging/pledging further align incentives with shareholders .
- Separation/CIC economics: Executive Severance Plan terms (1x salary+bonus; 1.5x on CIC) are moderate relative to small‑cap financials; double‑trigger equity acceleration mitigates entrenchment risk while preserving deal alignment .
- Trading signals: Annual RSU vesting around early March (and tax withholding) plus a single 3/7/2026 vest may create episodic but typically modest sell pressure from withholdings; 2024 Form 4 lateness was for tax withholding, not open‑market selling .