It Looks Like Carter Bankshares, Inc.'s (NASDAQ:CARE) CEO May Expect Their Salary To Be Put Under The Microscope
Carter Bankshares, Inc. (NASDAQ:CARE) has not performed well recently and CEO Litz Van Dyke will probably need to up their game. At the upcoming AGM on 23 June 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.
See our latest analysis for Carter Bankshares
How Does Total Compensation For Litz Van Dyke Compare With Other Companies In The Industry?
According to our data, Carter Bankshares, Inc. has a market capitalization of US$385m, and paid its CEO total annual compensation worth US$786k over the year to December 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at US$590.3k constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.1m. From this we gather that Litz Van Dyke is paid around the median for CEOs in the industry. Furthermore, Litz Van Dyke directly owns US$270k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$590k | US$570k | 75% |
Other | US$195k | US$229k | 25% |
Total Compensation | US$786k | US$799k | 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, Carter Bankshares 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.
A Look at Carter Bankshares, Inc.'s Growth Numbers
Over the last three years, Carter Bankshares, Inc. has shrunk its earnings per share by 69% per year. In the last year, its revenue is down 5.2%.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Carter Bankshares, Inc. Been A Good Investment?
Given the total shareholder loss of 17% over three years, many shareholders in Carter Bankshares, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Carter Bankshares (free visualization of insider trades).
Switching gears from Carter Bankshares, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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