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Why We Think Home Federal Bancorp, Inc. of Louisiana's (NASDAQ:HFBL) CEO Compensation Is Not Excessive At All

Performance at Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) has been reasonably good and CEO Jim Barlow has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 16 November 2022, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Home Federal Bancorp of Louisiana

How Does Total Compensation For Jim Barlow Compare With Other Companies In The Industry?

According to our data, Home Federal Bancorp, Inc. of Louisiana has a market capitalization of US$55m, and paid its CEO total annual compensation worth US$578k over the year to June 2022. Notably, that's a decrease of 39% over the year before. In particular, the salary of US$291.3k, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$567k. From this we gather that Jim Barlow is paid around the median for CEOs in the industry. Furthermore, Jim Barlow directly owns US$3.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2022

2021

Proportion (2022)

Salary

US$291k

US$282k

50%

Other

US$287k

US$673k

50%

Total Compensation

US$578k

US$955k

100%

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Home Federal Bancorp of Louisiana is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

Home Federal Bancorp, Inc. of Louisiana's Growth

Home Federal Bancorp, Inc. of Louisiana has seen its earnings per share (EPS) increase by 8.4% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Home Federal Bancorp, Inc. of Louisiana Been A Good Investment?

With a total shareholder return of 7.2% over three years, Home Federal Bancorp, Inc. of Louisiana has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Home Federal Bancorp of Louisiana that investors should be aware of in a dynamic business environment.

Important note: Home Federal Bancorp of Louisiana is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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