In 2012 Bob Harrison was appointed CEO of First Hawaiian, Inc. (NASDAQ:FHB). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Bob Harrison's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that First Hawaiian, Inc. has a market cap of US$3.8b, and reported total annual CEO compensation of US$4.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.
So Bob Harrison receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at First Hawaiian has changed from year to year.
Is First Hawaiian, Inc. Growing?
On average over the last three years, First Hawaiian, Inc. has grown earnings per share (EPS) by 9.2% each year (using a line of best fit). In the last year, its revenue changed by just 0.7%.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has First Hawaiian, Inc. Been A Good Investment?
Given the total loss of 7.5% over three years, many shareholders in First Hawaiian, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Bob Harrison is paid around what is normal the leaders of comparable size companies.
We would like to see somewhat stronger per share growth. And it's hard to argue that the returns over the last three years have delighted. So suffice it to say we don't think the compensation is modest. Whatever your view on compensation, you might want to check if insiders are buying or selling First Hawaiian shares (free trial).
Important note: First Hawaiian 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 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.
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