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Chris Oddleifson has been the CEO of Independent Bank Corp. (NASDAQ:INDB) since 2003. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Chris Oddleifson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Independent Bank Corp. has a market cap of US$2.8b, and reported total annual CEO compensation of US$2.3m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$739k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
A first glance this seems like a real positive for shareholders, since Chris Oddleifson is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Independent Bank has changed from year to year.
Is Independent Bank Corp. Growing?
On average over the last three years, Independent Bank Corp. has grown earnings per share (EPS) by 19% each year (using a line of best fit). It achieved revenue growth of 29% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Independent Bank Corp. Been A Good Investment?
With a total shareholder return of 30% over three years, Independent Bank Corp. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Independent Bank Corp. pays its CEO less than similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Chris Oddleifson is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. So you may want to check if insiders are buying Independent Bank shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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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