Pete Johnson has been the CEO of Eagle Bancorp Montana, Inc. (NASDAQ:EBMT) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Pete Johnson Compare With Other Companies In The Industry?
Our data indicates that Eagle Bancorp Montana, Inc. has a market capitalization of US$126m, and total annual CEO compensation was reported as US$553k for the year to December 2019. We note that's an increase of 11% above last year. In particular, the salary of US$300.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$635k. This suggests that Eagle Bancorp Montana remunerates its CEO largely in line with the industry average. Moreover, Pete Johnson also holds US$1.7m worth of Eagle Bancorp Montana stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Eagle Bancorp Montana pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Eagle Bancorp Montana, Inc.'s Growth
Over the past three years, Eagle Bancorp Montana, Inc. has seen its earnings per share (EPS) grow by 22% per year. In the last year, its revenue is up 52%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Eagle Bancorp Montana, Inc. Been A Good Investment?
Eagle Bancorp Montana, Inc. has generated a total shareholder return of 5.2% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As previously discussed, Pete is compensated close to the median for companies of its size, and which belong to the same industry. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 2 which are a bit concerning) in Eagle Bancorp Montana we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
This article by Simply Wall St is general in nature. 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.
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