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Is First Financial Northwest, Inc. (NASDAQ:FFNW) Excessively Paying Its CEO?

Simply Wall St

In 2013 Joe Kiley was appointed CEO of First Financial Northwest, Inc. (NASDAQ:FFNW). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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 Financial Northwest

How Does Joe Kiley's Compensation Compare With Similar Sized Companies?

According to our data, First Financial Northwest, Inc. has a market capitalization of US$167m, and pays its CEO total annual compensation worth US$728k. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at US$438k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.0m.

That means Joe Kiley 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 First Financial Northwest has changed over time.

NasdaqGS:FFNW CEO Compensation, April 17th 2019

Is First Financial Northwest, Inc. Growing?

First Financial Northwest, Inc. has increased its earnings per share (EPS) by an average of 32% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 19%.

This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has First Financial Northwest, Inc. Been A Good Investment?

First Financial Northwest, Inc. has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. 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...

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

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. Shareholders may want to check for free if First Financial Northwest 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.