A Look At First National's (NASDAQ:FXNC) CEO Remuneration
Scott Harvard has been the CEO of First National Corporation (NASDAQ:FXNC) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for First National
Comparing First National Corporation's CEO Compensation With the industry
Our data indicates that First National Corporation has a market capitalization of US$78m, and total annual CEO compensation was reported as US$462k for the year to December 2019. That's a notable decrease of 8.7% on last year. Notably, the salary which is US$327.7k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$609k. So it looks like First National compensates Scott Harvard in line with the median for the industry. What's more, Scott Harvard holds US$859k worth of shares in the company in their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$328k | US$319k | 71% |
Other | US$134k | US$186k | 29% |
Total Compensation | US$462k | US$505k | 100% |
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. According to our research, First National has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
First National Corporation's Growth
First National Corporation's earnings per share (EPS) grew 7.5% per year over the last three years. In the last year, its revenue is down 5.1%.
We generally like to see a little 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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has First National Corporation Been A Good Investment?
Since shareholders would have lost about 2.6% over three years, some First National Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we noted earlier, First National 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. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for First National that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
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