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Is Bank of Marin Bancorp's (NASDAQ:BMRC) CEO Pay Justified?

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Simply Wall St
·4 min read
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Russ Colombo became the CEO of Bank of Marin Bancorp (NASDAQ:BMRC) in 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Bank of Marin Bancorp

How Does Russ Colombo's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Bank of Marin Bancorp has a market cap of US$421m, and reported total annual CEO compensation of US$1.2m for the year to December 2019. That's less than last year. While we always look at total compensation first, we note that the salary component is less, at US$478k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$2.3m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Bank of Marin Bancorp stands. Talking in terms of the sector, salary represented approximately 43% of total compensation out of all the companies we analysed, while other remuneration made up 57% of the pie. Bank of Marin Bancorp does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.

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. You can see a visual representation of the CEO compensation at Bank of Marin Bancorp, below.

NasdaqCM:BMRC CEO Compensation May 21st 2020
NasdaqCM:BMRC CEO Compensation May 21st 2020

Is Bank of Marin Bancorp Growing?

Bank of Marin Bancorp has seen earnings per share (EPS) move positively by an average of 19% a year, over the last three years (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Bank of Marin Bancorp Been A Good Investment?

Bank of Marin Bancorp has not done too badly by shareholders, with a total return of 8.1%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

It looks like Bank of Marin Bancorp pays its CEO less than similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Russ Colombo is overcompensated. It's good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. On another note, Bank of Marin Bancorp has 2 warning signs (and 1 which is potentially serious) we think you should know about.

If you want to buy a stock that is better than Bank of Marin Bancorp, this free list of high return, low debt companies is a great place to look.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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. Thank you for reading.