Joe Dively became the CEO of First Mid Bancshares, Inc. (NASDAQ:FMBH) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for First Mid Bancshares.
Comparing First Mid Bancshares, Inc.'s CEO Compensation With the industry
Our data indicates that First Mid Bancshares, Inc. has a market capitalization of US$424m, and total annual CEO compensation was reported as US$885k for the year to December 2019. We note that's a decrease of 16% compared to last year. In particular, the salary of US$444.9k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.3m. This suggests that First Mid Bancshares remunerates its CEO largely in line with the industry average. Moreover, Joe Dively also holds US$1.6m worth of First Mid Bancshares 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. First Mid Bancshares is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
First Mid Bancshares, Inc.'s Growth
Over the past three years, First Mid Bancshares, Inc. has seen its earnings per share (EPS) grow by 9.0% per year. In the last year, its revenue is up 9.9%.
We'd prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has First Mid Bancshares, Inc. Been A Good Investment?
Since shareholders would have lost about 26% over three years, some First Mid Bancshares, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, First Mid Bancshares pays its CEO in line with similar-sized companies belonging to the same industry. But with negative shareholder returns and unimpressive earnings growth, shareholders will surely be disturbed. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Joe deserves a raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for First Mid Bancshares (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.