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Is Community Trust Bancorp, Inc.'s (NASDAQ:CTBI) CEO Overpaid Relative To Its Peers?

Simply Wall St
·3 min read

Jean Hale became the CEO of Community Trust Bancorp, Inc. (NASDAQ:CTBI) in 1999. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Community Trust Bancorp

How Does Jean Hale's Compensation Compare With Similar Sized Companies?

Our data indicates that Community Trust Bancorp, Inc. is worth US$785m, and total annual CEO compensation was reported as US$1.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$623k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.5m.

Most shareholders would consider it a positive that Jean Hale takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Community Trust Bancorp has changed from year to year.

NasdaqGS:CTBI CEO Compensation, February 13th 2020
NasdaqGS:CTBI CEO Compensation, February 13th 2020

Is Community Trust Bancorp, Inc. Growing?

On average over the last three years, Community Trust Bancorp, Inc. has grown earnings per share (EPS) by 12% each year (using a line of best fit). Its revenue is up 2.6% over last year.

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. It could be important to check this free visual depiction of what analysts expect for the future.

Has Community Trust Bancorp, Inc. Been A Good Investment?

With a total shareholder return of 2.5% over three years, Community Trust Bancorp, Inc. has done okay by shareholders. 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...

Community Trust Bancorp, Inc. is currently paying its CEO below what is normal for companies of its size.

Considering the underlying business is growing earnings, this would suggest the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Jean Hale is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Community Trust Bancorp.

Important note: Community Trust Bancorp 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.