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As many shareholders of County Bancorp, Inc. (NASDAQ:ICBK) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18 May 2021. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
How Does Total Compensation For Tim Schneider Compare With Other Companies In The Industry?
At the time of writing, our data shows that County Bancorp, Inc. has a market capitalization of US$142m, and reported total annual CEO compensation of US$863k for the year to December 2020. Notably, that's an increase of 10% over the year before. In particular, the salary of US$440.4k, makes up a fairly large portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$572k. Hence, we can conclude that Tim Schneider is remunerated higher than the industry median. Furthermore, Tim Schneider directly owns US$2.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. County Bancorp is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
County Bancorp, Inc.'s Growth
Over the past three years, County Bancorp, Inc. has seen its earnings per share (EPS) grow by 9.2% per year. In the last year, its revenue is up 6.7%.
We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 County Bancorp, Inc. Been A Good Investment?
Given the total shareholder loss of 13% over three years, many shareholders in County Bancorp, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for County Bancorp (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
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.
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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