Litz Van Dyke became the CEO of Carter Bank & Trust (NASDAQ:CARE) in 2017. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Litz Van Dyke's Compensation Compare With Similar Sized Companies?
According to our data, Carter Bank & Trust has a market capitalization of US$518m, and paid its CEO total annual compensation worth US$735k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$497k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.
A first glance this seems like a real positive for shareholders, since Litz Van Dyke 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 Carter Bank & Trust, below.
Is Carter Bank & Trust Growing?
On average over the last three years, Carter Bank & Trust has shrunk earnings per share by 55% each year (measured with a line of best fit). Its revenue is up 20% over last year.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Carter Bank & Trust Been A Good Investment?
I think that the total shareholder return of 63%, over three years, would leave most Carter Bank & Trust shareholders smiling. 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.
It looks like Carter Bank & Trust pays its CEO less than similar sized companies.
It's well worth noting that while Litz Van Dyke is paid less than most company leaders (at similar sized companies), there isn't much EPS growth. Having said that, returns to shareholders have been great. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. Whatever your view on compensation, you might want to check if insiders are buying or selling Carter Bank & Trust shares (free trial).
If you want to buy a stock that is better than Carter Bank & Trust, this free list of high return, low debt companies is a great place to look.
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