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Is First Defiance Financial Corp.’s (NASDAQ:FDEF) CEO Paid Enough Relative To Peers?

Rowena Gregory

Don Hileman became the CEO of First Defiance Financial Corp. (NASDAQ:FDEF) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

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How Does Don Hileman’s Compensation Compare With Similar Sized Companies?

Our data indicates that First Defiance Financial Corp. is worth US$527m, and total annual CEO compensation is US$982k. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$450k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO compensation was US$1.6m.

Most shareholders would consider it a positive that Don Hileman takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

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

NasdaqGS:FDEF CEO Compensation January 16th 19

Is First Defiance Financial Corp. Growing?

Over the last three years First Defiance Financial Corp. has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). It achieved revenue growth of 13% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.

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

Has First Defiance Financial Corp. Been A Good Investment?

Boasting a total shareholder return of 51% over three years, First Defiance Financial Corp. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.

In Summary…

It appears that First Defiance Financial Corp. remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Don Hileman deserves a raise!

It’s not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling First Defiance Financial shares (free trial).

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.