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Chip Mahan is the CEO of Live Oak Bancshares, Inc. (NASDAQ:LOB). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
How Does Chip Mahan's Compensation Compare With Similar Sized Companies?
Our data indicates that Live Oak Bancshares, Inc. is worth US$748m, and total annual CEO compensation was reported as US$987k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$511k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.6m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Live Oak Bancshares has changed over time.
Is Live Oak Bancshares, Inc. Growing?
On average over the last three years, Live Oak Bancshares, Inc. has grown earnings per share (EPS) by 17% each year (using a line of best fit). In the last year, its revenue is down 13%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.
Has Live Oak Bancshares, Inc. Been A Good Investment?
Live Oak Bancshares, Inc. has served shareholders reasonably well, with a total return of 23% over three years. 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.
It looks like Live Oak Bancshares, Inc. pays its CEO less than similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Chip Mahan is overcompensated. It's good to see reasonable payment of the CEO, even while the business improves. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Live Oak Bancshares.
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.
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 firstname.lastname@example.org. 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.