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Is Live Oak Bancshares, Inc.'s (NASDAQ:LOB) CEO Paid Enough Relative To Peers?

Simply Wall St

Chip Mahan is the CEO of Live Oak Bancshares, Inc. (NASDAQ:LOB). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

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See our latest analysis for Live Oak Bancshares

How Does Chip Mahan's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Live Oak Bancshares, Inc. has a market cap of US$665m, and is paying total annual CEO compensation of US$987k. (This figure is for the year to December 2018). We note that's an increase of 23% above last year. While we always look at total compensation first, we note that the salary component is less, at US$511k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.

A first glance this seems like a real positive for shareholders, since Chip Mahan is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Live Oak Bancshares has changed from year to year.

NasdaqGS:LOB CEO Compensation, May 17th 2019

Is Live Oak Bancshares, Inc. Growing?

On average over the last three years, Live Oak Bancshares, Inc. has grown earnings per share (EPS) by 51% each year (using a line of best fit). It achieved revenue growth of 2.3% over the last year.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has Live Oak Bancshares, Inc. Been A Good Investment?

With a total shareholder return of 7.4% over three years, Live Oak Bancshares, Inc. has done okay by shareholders. 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...

Live Oak Bancshares, Inc. is currently paying its CEO below what is normal for companies of its size. Many would consider this to indicate that the pay is modest since the business is growing. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Chip Mahan is overcompensated.

It's great to see a company that pays its CEO reasonably, even while growing. It would be an additional positive if insiders are buying shares. Shareholders may want to check for free if Live Oak Bancshares insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 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.