Yahoo Finance Here's Why Shareholders Should Examine Eagle Bancorp, Inc.'s (NASDAQ:EGBN) CEO Compensation Package More Closely
Key Insights
Eagle Bancorp to hold its Annual General Meeting on 16th of May
Total pay for CEO Susan Riel includes US$907.4k salary
Total compensation is 125% above industry average
Over the past three years, Eagle Bancorp's EPS fell by 19% and over the past three years, the total loss to shareholders 57%
The results at Eagle Bancorp, Inc. (NASDAQ:EGBN) have been quite disappointing recently and CEO Susan Riel bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 16th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
See our latest analysis for Eagle Bancorp
Comparing Eagle Bancorp, Inc.'s CEO Compensation With The Industry
According to our data, Eagle Bancorp, Inc. has a market capitalization of US$597m, and paid its CEO total annual compensation worth US$3.2m over the year to December 2023. We note that's a decrease of 28% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$907k.
On comparing similar companies from the American Banks industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.4m. This suggests that Susan Riel is paid more than the median for the industry. Furthermore, Susan Riel directly owns US$7.1m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$907k | US$856k | 28% |
Other | US$2.3m | US$3.6m | 72% |
Total Compensation | US$3.2m | US$4.4m | 100% |
On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. In Eagle 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.
Eagle Bancorp, Inc.'s Growth
Over the last three years, Eagle Bancorp, Inc. has shrunk its earnings per share by 19% per year. It saw its revenue drop 25% over the last year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Eagle Bancorp, Inc. Been A Good Investment?
With a total shareholder return of -57% over three years, Eagle Bancorp, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Eagle Bancorp that investors should look into moving forward.
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.
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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.
