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Is Banner Corporation (NASDAQ:BANR) Overpaying Its CEO?

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In 2010 Mark Grescovich was appointed CEO of Banner Corporation (NASDAQ:BANR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.

View our latest analysis for Banner

How Does Mark Grescovich's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Banner Corporation has a market cap of US$1.9b, and reported total annual CEO compensation of US$2.5m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$791k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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$4.1m.

A first glance this seems like a real positive for shareholders, since Mark Grescovich is paid less than the average total compensation paid by similar sized companies. 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 Banner, below.

NasdaqGS:BANR CEO Compensation, October 24th 2019
NasdaqGS:BANR CEO Compensation, October 24th 2019

Is Banner Corporation Growing?

Banner Corporation has increased its earnings per share (EPS) by an average of 23% a year, over the last three years (using a line of best fit). It achieved revenue growth of 13% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Banner Corporation Been A Good Investment?

Boasting a total shareholder return of 37% over three years, Banner Corporation has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Banner Corporation is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Mark Grescovich deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Banner.

Important note: Banner may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.