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Is ESSA Bancorp, Inc.’s (NASDAQ:ESSA) CEO Pay Justified?

Simply Wall St

Gary Olson became the CEO of ESSA Bancorp, Inc. (NASDAQ:ESSA) in 2006. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for ESSA Bancorp

How Does Gary Olson’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that ESSA Bancorp, Inc. has a market cap of US$177m, and is paying total annual CEO compensation of US$724k. (This number is for the twelve months until September 2018). That’s below the compensation, last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$420k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$964k.

That means Gary Olson 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 ESSA Bancorp has changed over time.

NasdaqGS:ESSA CEO Compensation, March 8th 2019

Is ESSA Bancorp, Inc. Growing?

Over the last three years ESSA Bancorp, Inc. has shrunk its earnings per share by an average of 11% per year (measured with a line of best fit). Its revenue is up 5.0% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has ESSA Bancorp, Inc. Been A Good Investment?

With a total shareholder return of 27% over three years, ESSA Bancorp, Inc. shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

Remuneration for Gary Olson is close enough to the median pay for a CEO of a similar sized company .

The company isn’t growing earnings per share, and nor have the total returns inspired us. We wouldn’t say the CEO pay is too high, but it’s probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Shareholders may want to check for free if ESSA Bancorp insiders are buying or selling shares.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.