Dave Ritchie has been the CEO of American River Bankshares (NASDAQ:AMRB) since 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Dave Ritchie's Compensation Compare With Similar Sized Companies?
Our data indicates that American River Bankshares is worth US$56m, and total annual CEO compensation was reported as US$527k for the year to December 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$275k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$608k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 43% of total compensation represents salary and 57% is other remuneration. American River Bankshares does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
That means Dave Ritchie receives fairly typical remuneration for the CEO of a company that size. 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. The graphic below shows how CEO compensation at American River Bankshares has changed from year to year.
Is American River Bankshares Growing?
Over the last three years American River Bankshares has seen earnings per share (EPS) move in a positive direction by an average of 5.6% per year (using a line of best fit). In the last year, its revenue is up 8.6%.
I'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.
Has American River Bankshares Been A Good Investment?
Given the total loss of 33% over three years, many shareholders in American River Bankshares are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Dave Ritchie is paid around what is normal for the leaders of comparable size companies.
The company cannot boast particularly strong per share growth. And we think the shareholder returns - over three years - have been underwhelming. So many would argue that the CEO is certainly not underpaid. Taking a breather from CEO compensation, we've spotted 3 warning signs for American River Bankshares (of which 1 is significant!) you should know about in order to have a holistic understanding of the stock.
If you want to buy a stock that is better than American River Bankshares, this free list of high return, low debt companies is a great place to look.
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