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How Does MainStreet Bancshares' (NASDAQ:MNSB) CEO Pay Compare With Company Performance?

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·3 min read
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This article will reflect on the compensation paid to Jeff Dick who has served as CEO of MainStreet Bancshares, Inc. (NASDAQ:MNSB) since 2016. This analysis will also assess whether MainStreet Bancshares pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for MainStreet Bancshares

How Does Total Compensation For Jeff Dick Compare With Other Companies In The Industry?

According to our data, MainStreet Bancshares, Inc. has a market capitalization of US$121m, and paid its CEO total annual compensation worth US$791k over the year to December 2019. That's a notable increase of 18% on last year. Notably, the salary which is US$500.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$635k. So it looks like MainStreet Bancshares compensates Jeff Dick in line with the median for the industry. Moreover, Jeff Dick also holds US$2.4m worth of MainStreet Bancshares stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$500k

US$440k

63%

Other

US$291k

US$230k

37%

Total Compensation

US$791k

US$670k

100%

Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. It's interesting to note that MainStreet Bancshares pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at MainStreet Bancshares, Inc.'s Growth Numbers

MainStreet Bancshares, Inc. has seen its earnings per share (EPS) increase by 15% a year over the past three years. Its revenue is up 3.3% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has MainStreet Bancshares, Inc. Been A Good Investment?

Given the total shareholder loss of 5.7% over three years, many shareholders in MainStreet Bancshares, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Jeff is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Jeff is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for MainStreet Bancshares that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.