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What We Learned About Republic First Bancorp's (NASDAQ:FRBK) CEO Compensation

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This article will reflect on the compensation paid to Harry Madonna who has served as CEO of Republic First Bancorp, Inc. (NASDAQ:FRBK) since 2001. This analysis will also assess whether Republic First Bancorp pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Republic First Bancorp

Comparing Republic First Bancorp, Inc.'s CEO Compensation With the industry

Our data indicates that Republic First Bancorp, Inc. has a market capitalization of US$126m, and total annual CEO compensation was reported as US$703k for the year to December 2019. That's a notable decrease of 19% on last year. In particular, the salary of US$415.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$654k. So it looks like Republic First Bancorp compensates Harry Madonna in line with the median for the industry. Moreover, Harry Madonna also holds US$1.5m worth of Republic First Bancorp 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$415k

US$415k

59%

Other

US$288k

US$448k

41%

Total Compensation

US$703k

US$863k

100%

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Republic First Bancorp pays out a greater portion of remuneration through salary, compared to the 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

Republic First Bancorp, Inc.'s Growth

Over the last three years, Republic First Bancorp, Inc. has shrunk its earnings per share by 55% per year. It achieved revenue growth of 7.0% over the last year.

Few shareholders would be pleased to read that earnings have declined. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Republic First Bancorp, Inc. Been A Good Investment?

Since shareholders would have lost about 77% over three years, some Republic First Bancorp, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Harry is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Republic First Bancorp that investors should think about before committing capital to this 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.

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