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In 2009 Ron Haan was appointed CEO of Macatawa Bank Corporation (NASDAQ:MCBC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Ron Haan’s Compensation Compare With Similar Sized Companies?
According to our data, Macatawa Bank Corporation has a market capitalization of US$331m, and pays its CEO total annual compensation worth US$523k. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$420k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO compensation was US$1.5m.
Most shareholders would consider it a positive that Ron Haan takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Macatawa Bank has changed from year to year.
Is Macatawa Bank Corporation Growing?
On average over the last three years, Macatawa Bank Corporation has grown earnings per share (EPS) by 19% each year (using a line of best fit). It achieved revenue growth of 8.4% over the 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 Macatawa Bank Corporation Been A Good Investment?
Most shareholders would probably be pleased with Macatawa Bank Corporation for providing a total return of 75% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Macatawa Bank Corporation 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. The pleasing shareholder returns are the cherry on top; you might even consider that Ron Haan deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Macatawa Bank shares (free trial).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.