How Should Investors Feel About Shore Bancshares, Inc.'s (NASDAQ:SHBI) CEO Pay?
In 2013 Scott Beatty was appointed CEO of Shore Bancshares, Inc. (NASDAQ:SHBI). 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.
View our latest analysis for Shore Bancshares
How Does Scott Beatty's Compensation Compare With Similar Sized Companies?
Our data indicates that Shore Bancshares, Inc. is worth US$208m, and total annual CEO compensation was reported as US$615k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$450k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.1m.
A first glance this seems like a real positive for shareholders, since Scott Beatty is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Shore Bancshares, below.
Is Shore Bancshares, Inc. Growing?
On average over the last three years, Shore Bancshares, Inc. has grown earnings per share (EPS) by 22% each year (using a line of best fit). Its revenue is up 16% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Shore Bancshares, Inc. Been A Good Investment?
Shore Bancshares, Inc. has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
It appears that Shore Bancshares, Inc. remunerates its CEO below most similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that Scott Beatty is paid too much. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling Shore Bancshares shares (free trial).
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.
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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.
