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Jim Blake has been the CEO of HarborOne Bancorp, Inc. (NASDAQ:HONE) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether HarborOne Bancorp pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing HarborOne Bancorp, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that HarborOne Bancorp, Inc. has a market capitalization of US$546m, and reported total annual CEO compensation of US$2.3m for the year to December 2019. That's a notable increase of 29% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$777k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.2m. Accordingly, our analysis reveals that HarborOne Bancorp, Inc. pays Jim Blake north of the industry median. What's more, Jim Blake holds US$2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. In HarborOne Bancorp's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
HarborOne Bancorp, Inc.'s Growth
HarborOne Bancorp, Inc.'s earnings per share (EPS) grew 41% per year over the last three years. In the last year, its revenue is up 32%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has HarborOne Bancorp, Inc. Been A Good Investment?
Since shareholders would have lost about 3.4% over three years, some HarborOne Bancorp, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Jim is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for HarborOne Bancorp that investors should be aware of in a dynamic business environment.
Important note: HarborOne Bancorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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