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Is Citizens Holding Company (NASDAQ:CIZN) Excessively Paying Its CEO?

Simply Wall St

Greg McKee has been the CEO of Citizens Holding Company (NASDAQ:CIZN) since 2003. First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Citizens Holding

How Does Greg McKee's Compensation Compare With Similar Sized Companies?

According to our data, Citizens Holding Company has a market capitalization of US$123m, and paid its CEO total annual compensation worth US$476k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$296k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$519k.

So Greg McKee is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Citizens Holding has changed from year to year.

NasdaqGM:CIZN CEO Compensation, January 16th 2020

Is Citizens Holding Company Growing?

Citizens Holding Company has reduced its earnings per share by an average of 8.9% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 8.3%.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Citizens Holding Company Been A Good Investment?

Since shareholders would have lost about 1.5% over three years, some Citizens Holding Company shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Greg McKee is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. So you may want to check if insiders are buying Citizens Holding shares with their own money (free access).

Important note: Citizens Holding 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.

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.