Tim O’Dell became the CEO of Central Federal Corporation (NASDAQ:CFBK) in 2012. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tim O’Dell's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Central Federal Corporation has a market cap of US$54m, and reported total annual CEO compensation of US$741k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$300k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$496k.
It would therefore appear that Central Federal Corporation pays Tim O’Dell more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Central Federal has changed from year to year.
Is Central Federal Corporation Growing?
On average over the last three years, Central Federal Corporation has grown earnings per share (EPS) by 17% each year (using a line of best fit). It achieved revenue growth of 51% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Central Federal Corporation Been A Good Investment?
Most shareholders would probably be pleased with Central Federal Corporation for providing a total return of 46% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared total CEO remuneration at Central Federal Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Central Federal shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.