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This article will reflect on the compensation paid to Min Kim who has served as CEO of OP Bancorp (NASDAQ:OPBK) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for OP Bancorp.
Comparing OP Bancorp's CEO Compensation With the industry
At the time of writing, our data shows that OP Bancorp has a market capitalization of US$100m, and reported total annual CEO compensation of US$984k for the year to December 2019. That's a modest increase of 3.4% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$487k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$514k. Hence, we can conclude that Min Kim is remunerated higher than the industry median. Moreover, Min Kim also holds US$2.5m worth of OP Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. OP Bancorp sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
OP Bancorp's Growth
OP Bancorp's earnings per share (EPS) grew 7.7% per year over the last three years. In the last year, its revenue is down 11%.
We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is 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 OP Bancorp Been A Good Investment?
Given the total shareholder loss of 26% over three years, many shareholders in OP Bancorp are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, OP Bancorp pays its CEO higher than the norm for similar-sized companies belonging to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. And the situation doesn't look all that good when you see Min is remunerated higher than the industry average. Taking all this into account, it could be hard to get shareholder support for giving Min a raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for OP Bancorp 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.
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