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In 2004 Norm Lowery was appointed CEO of First Financial Corporation (NASDAQ:THFF). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 Norm Lowery's Compensation Compare With Similar Sized Companies?
Our data indicates that First Financial Corporation is worth US$622m, and total annual CEO compensation was reported as US$1.9m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$680k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.6m.
That means Norm Lowery receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at First Financial has changed over time.
Is First Financial Corporation Growing?
On average over the last three years, First Financial Corporation has grown earnings per share (EPS) by 11% each year (using a line of best fit). Its revenue is up 4.3% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has First Financial Corporation Been A Good Investment?
Since shareholders would have lost about 2.2% over three years, some First Financial Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Norm Lowery is paid around what is normal the leaders of comparable size companies.
We like that the company is growing EPS, but it's disappointing to see negative shareholder returns over three years. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling First Financial shares (free trial).
Important note: First Financial 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 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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