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In 2012 Brad Krehbiel was appointed CEO of HMN Financial, Inc. (NASDAQ:HMNF). 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 process should give us an idea about how appropriately the CEO is paid.
How Does Brad Krehbiel's Compensation Compare With Similar Sized Companies?
According to our data, HMN Financial, Inc. has a market capitalization of US$86m, and paid its CEO total annual compensation worth US$468k over the year to December 2019. That's just a smallish increase of 4.3% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$333k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$601k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where HMN Financial stands. On a sector level, around 58% of total compensation represents salary and 42% is other remuneration. HMN Financial does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
So Brad Krehbiel is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see a visual representation of the CEO compensation at HMN Financial, below.
Is HMN Financial, Inc. Growing?
On average over the last three years, HMN Financial, Inc. has seen earnings per share (EPS) move in a favourable direction by 15% each year (using a line of best fit). Its revenue is up 4.7% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has HMN Financial, Inc. Been A Good Investment?
Given the total loss of 1.8% over three years, many shareholders in HMN Financial, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Brad Krehbiel is paid around the same as most CEOs of similar size companies.
We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. Moving away from CEO compensation for the moment, we've identified 2 warning signs for HMN Financial that you should be aware of before investing.
If you want to buy a stock that is better than HMN Financial, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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