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Is First Northwest Bancorp (NASDAQ:FNWB) Excessively Paying Its CEO?

Raj Burman

Larry Hueth became the CEO of First Northwest Bancorp (NASDAQ:FNWB) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

View our latest analysis for First Northwest Bancorp

How Does Larry Hueth’s Compensation Compare With Similar Sized Companies?

Our data indicates that First Northwest Bancorp is worth US$159m, and total annual CEO compensation is US$1.4m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$294k. 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$986k.

As you can see, Larry Hueth is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean First Northwest Bancorp is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at First Northwest Bancorp has changed from year to year.

NasdaqGM:FNWB CEO Compensation January 4th 19

Is First Northwest Bancorp Growing?

Over the last three years First Northwest Bancorp has grown its earnings per share (EPS) by an average of 49% per year. It achieved revenue growth of 11% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.

Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has First Northwest Bancorp Been A Good Investment?

With a total shareholder return of 12% over three years, First Northwest Bancorp shareholders would, in general, 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…

We compared total CEO remuneration at First Northwest Bancorp with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at First Northwest Bancorp.

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.

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.