Jim Lally has been the CEO of Enterprise Financial Services Corp (NASDAQ:EFSC) since 2017. 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.
How Does Jim Lally's Compensation Compare With Similar Sized Companies?
Our data indicates that Enterprise Financial Services Corp is worth US$1.2b, and total annual CEO compensation was reported as US$1.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$492k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.6m.
A first glance this seems like a real positive for shareholders, since Jim Lally is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Enterprise Financial Services has changed over time.
Is Enterprise Financial Services Corp Growing?
Over the last three years Enterprise Financial Services Corp has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). Its revenue is up 21% over 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Enterprise Financial Services Corp Been A Good Investment?
Enterprise Financial Services Corp has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that Enterprise Financial Services Corp remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Jim Lally is overcompensated. It's great to see a company that pays its CEO reasonably, even while growing. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. So you may want to check if insiders are buying Enterprise Financial Services shares with their own money (free access).
If you want to buy a stock that is better than Enterprise Financial Services, this free list of high return, low debt companies is a great place to look.
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