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Is First United Corporation’s (NASDAQ:FUNC) CEO Salary Justified?

Armando Maloney

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Carissa Rodeheaver became the CEO of First United Corporation (NASDAQ:FUNC) in 2016. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for First United

How Does Carissa Rodeheaver’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that First United Corporation has a market cap of US$115m, and is paying total annual CEO compensation of US$375k. (This is based on the year to 2017). Notably, the salary of US$365k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$300k.

So Carissa Rodeheaver is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

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

NASDAQGS:FUNC CEO Compensation February 8th 19

Is First United Corporation Growing?

On average over the last three years, First United Corporation has shrunk earnings per share by 22% each year (measured with a line of best fit). Its revenue is up 12% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has First United Corporation Been A Good Investment?

Boasting a total shareholder return of 92% over three years, First United Corporation 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…

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

The company isn’t growing earnings per share, but shareholder returns have been strong over the last three years. So we doubt many are complaining about the fairly normal CEO pay. So you may want to check if insiders are buying First United shares with their own money (free access).

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.

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.