This article will reflect on the compensation paid to Randy Eslick who has served as CEO of Bank of Commerce Holdings (NASDAQ:BOCH) since 2013. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Randy Eslick Compare With Other Companies In The Industry?
Our data indicates that Bank of Commerce Holdings has a market capitalization of US$120m, and total annual CEO compensation was reported as US$703k for the year to December 2019. Notably, that's a decrease of 9.2% over the year before. Notably, the salary which is US$440.0k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$644k. This suggests that Bank of Commerce Holdings remunerates its CEO largely in line with the industry average. Moreover, Randy Eslick also holds US$384k worth of Bank of Commerce Holdings stock directly under their own name.
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. Bank of Commerce Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Bank of Commerce Holdings' Growth
Over the past three years, Bank of Commerce Holdings has seen its earnings per share (EPS) grow by 5.7% per year. Its revenue is down 3.3% over the previous year.
We generally like to see a little revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Bank of Commerce Holdings Been A Good Investment?
Since shareholders would have lost about 28% over three years, some Bank of Commerce Holdings investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Randy is compensated close to the median for companies of its size, and which belong to the same industry. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Bank of Commerce Holdings we think you should know about.
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.
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