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How Much is OceanFirst Financial's (NASDAQ:OCFC) CEO Getting Paid?

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Simply Wall St
·4 min read
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This article will reflect on the compensation paid to Chris Maher who has served as CEO of OceanFirst Financial Corp. (NASDAQ:OCFC) since 2015. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for OceanFirst Financial

How Does Total Compensation For Chris Maher Compare With Other Companies In The Industry?

At the time of writing, our data shows that OceanFirst Financial Corp. has a market capitalization of US$956m, and reported total annual CEO compensation of US$2.9m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$946k.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$1.9m. This suggests that Chris Maher is paid more than the median for the industry. Furthermore, Chris Maher directly owns US$2.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$946k

US$846k

33%

Other

US$2.0m

US$2.1m

67%

Total Compensation

US$2.9m

US$2.9m

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. OceanFirst Financial pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at OceanFirst Financial Corp.'s Growth Numbers

Over the last three years, OceanFirst Financial Corp. has shrunk its earnings per share by 9.8% per year. Its revenue is down 1.7% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 OceanFirst Financial Corp. Been A Good Investment?

Given the total shareholder loss of 35% over three years, many shareholders in OceanFirst Financial Corp. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Chris is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for OceanFirst Financial that you should be aware of before investing.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.