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Is 1st Source Corporation's (NASDAQ:SRCE) CEO Pay Justified?

Simply Wall St

In 1979 Chris Murphy was appointed CEO of 1st Source Corporation (NASDAQ:SRCE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for 1st Source

How Does Chris Murphy's Compensation Compare With Similar Sized Companies?

According to our data, 1st Source Corporation has a market capitalization of US$1.3b, and paid its CEO total annual compensation worth US$1.7m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$746k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.9m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at 1st Source has changed from year to year.

NasdaqGS:SRCE CEO Compensation, December 24th 2019

Is 1st Source Corporation Growing?

On average over the last three years, 1st Source Corporation has grown earnings per share (EPS) by 17% each year (using a line of best fit). In the last year, its revenue is up 7.2%.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has 1st Source Corporation Been A Good Investment?

1st Source Corporation has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

It appears that 1st Source Corporation remunerates its CEO below most similar sized companies.

Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn't mean that Chris Murphy is paid too much. It's great to see a company that pays its CEO reasonably, even while growing. It would be an additional positive if insiders are buying shares. Shareholders may want to check for free if 1st Source insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.