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Is HomeStreet, Inc. (NASDAQ:HMST) Excessively Paying Its CEO?

Simply Wall St

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In 2010 Mark Mason was appointed CEO of HomeStreet, Inc. (NASDAQ:HMST). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for HomeStreet

How Does Mark Mason's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that HomeStreet, Inc. has a market cap of US$734m, and is paying total annual CEO compensation of US$1.9m. (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$690k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.2m.

That means Mark Mason receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at HomeStreet, below.

NasdaqGS:HMST CEO Compensation, April 5th 2019

Is HomeStreet, Inc. Growing?

Earnings per share at HomeStreet, Inc. are much the same as they were three years ago, albeit slightly lower, based on the trend. Its revenue is down -14% over last year.

In the last three years the company has failed to grow earnings per s. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has HomeStreet, Inc. Been A Good Investment?

HomeStreet, Inc. has served shareholders reasonably well, with a total return of 31% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Mark Mason is paid around the same as most CEOs of similar size companies.

We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We're not saying the CEO pay is too generous, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. So you may want to check if insiders are buying HomeStreet shares with their own money (free access).

If you want to buy a stock that is better than HomeStreet, this free list of high return, low debt companies is a great place to look.

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.