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How Should Investors Feel About Emclaire Financial's (NASDAQ:EMCF) CEO Remuneration?

Simply Wall St
·3 mins read

Bill Marsh became the CEO of Emclaire Financial Corp (NASDAQ:EMCF) in 2009, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Emclaire Financial

Comparing Emclaire Financial Corp's CEO Compensation With the industry

According to our data, Emclaire Financial Corp has a market capitalization of US$67m, and paid its CEO total annual compensation worth US$626k over the year to December 2019. That's a slightly lower by 6.0% over the previous year. Notably, the salary which is US$375.7k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$650k. This suggests that Emclaire Financial remunerates its CEO largely in line with the industry average. Moreover, Bill Marsh also holds US$1.6m worth of Emclaire Financial stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$376k

US$358k

60%

Other

US$250k

US$308k

40%

Total Compensation

US$626k

US$666k

100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. Emclaire Financial 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.

ceo-compensation
ceo-compensation

A Look at Emclaire Financial Corp's Growth Numbers

Over the past three years, Emclaire Financial Corp has seen its earnings per share (EPS) grow by 4.2% per year. In the last year, its revenue is down 4.6%.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Emclaire Financial Corp Been A Good Investment?

Since shareholders would have lost about 0.9% over three years, some Emclaire Financial Corp investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Emclaire Financial pays its CEO in line with similar-sized companies belonging to the same industry. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Bill deserves a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Emclaire Financial that you should be aware of before investing.

Switching gears from Emclaire Financial, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.