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Is First Commonwealth Financial Corporation’s (NYSE:FCF) CEO Pay Justified?

In 2012 Mike Price was appointed CEO of First Commonwealth Financial Corporation (NYSE:FCF). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for First Commonwealth Financial

How Does Mike Price’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that First Commonwealth Financial Corporation has a market cap of US$1.3b, and is paying total annual CEO compensation of US$1.0m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$459k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.6m.

Most shareholders would consider it a positive that Mike Price takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.

You can see, below, how CEO compensation at First Commonwealth Financial has changed over time.

NYSE:FCF CEO Compensation December 11th 18

Is First Commonwealth Financial Corporation Growing?

Over the last three years First Commonwealth Financial Corporation has grown its earnings per share (EPS) by an average of 14% per year. In the last year, its revenue is up 11%.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.

You might want to check this free visual report on analyst forecasts for future earnings.

Has First Commonwealth Financial Corporation Been A Good Investment?

I think that the total shareholder return of 51%, over three years, would leave most First Commonwealth Financial Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

First Commonwealth Financial 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. And given most shareholders are probably very happy with recent returns, you might even think that Mike Price deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. So you may want to check if insiders are buying First Commonwealth Financial shares with their own money (free access).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.