Does Mercantile Bank Corporation's (NASDAQ:MBWM) CEO Salary Reflect Performance?
Bob Kaminski became the CEO of Mercantile Bank Corporation (NASDAQ:MBWM) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
Check out our latest analysis for Mercantile Bank
How Does Bob Kaminski's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Mercantile Bank Corporation has a market cap of US$593m, and reported total annual CEO compensation of US$951k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$479k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.7m.
Most shareholders would consider it a positive that Bob Kaminski takes less total 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 Mercantile Bank has changed from year to year.
Is Mercantile Bank Corporation Growing?
Over the last three years Mercantile Bank Corporation has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). In the last year, its revenue is up 8.8%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Mercantile Bank Corporation Been A Good Investment?
With a total shareholder return of 10.0% over three years, Mercantile Bank Corporation has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Mercantile Bank Corporation is currently paying its CEO below what is normal for companies of its size.
Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that Bob Kaminski is paid too much. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But it would be nice if insiders were also buying shares. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Mercantile Bank.
Important note: Mercantile Bank 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 editorial-team@simplywallst.com. 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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