Yahoo Finance Here's Why Old National Bancorp's (NASDAQ:ONB) CEO Is Unlikely to Expect A Pay Rise This Year
Key Insights
Old National Bancorp will host its Annual General Meeting on 15th of May
Salary of US$1.14m is part of CEO Jim Ryan's total remuneration
The total compensation is similar to the average for the industry
Old National Bancorp's total shareholder return over the past three years was 3.2% while its EPS was down 1.4% over the past three years
Share price growth at Old National Bancorp (NASDAQ:ONB) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. Some of these issues will occupy shareholders' minds as the AGM rolls around on 15th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
See our latest analysis for Old National Bancorp
How Does Total Compensation For Jim Ryan Compare With Other Companies In The Industry?
At the time of writing, our data shows that Old National Bancorp has a market capitalization of US$5.5b, and reported total annual CEO compensation of US$6.5m for the year to December 2023. We note that's a decrease of 44% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
For comparison, other companies in the American Banks industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$5.7m. From this we gather that Jim Ryan is paid around the median for CEOs in the industry. Moreover, Jim Ryan also holds US$12m worth of Old National Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.1m | US$1.1m | 18% |
Other | US$5.4m | US$11m | 82% |
Total Compensation | US$6.5m | US$12m | 100% |
Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. In Old National Bancorp's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Old National Bancorp's Growth Numbers
Old National Bancorp has reduced its earnings per share by 1.4% a year over the last three years. In the last year, its revenue is down 5.0%.
Its a bit disappointing to see that the company has failed to grow its EPS. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Old National Bancorp Been A Good Investment?
Old National Bancorp has not done too badly by shareholders, with a total return of 3.2%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.
To Conclude...
The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Old National Bancorp that you should be aware of before investing.
Important note: Old National Bancorp 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.
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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.
