In 2004 Bob Jones was appointed CEO of Old National Bancorp (NASDAQ:ONB). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Bob Jones’s Compensation Compare With Similar Sized Companies?
Our data indicates that Old National Bancorp is worth US$2.8b, and total annual CEO compensation is US$2.6m. That’s a notable increase of 28% on last year. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.
A first glance this seems like a real positive for shareholders, since Bob Jones is paid less than the average compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Old National Bancorp has changed over time.
Is Old National Bancorp Growing?
Over the last three years Old National Bancorp has shrunk its earnings per share by an average of 11% per year. Its revenue is up 3.8% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Old National Bancorp Been A Good Investment?
Boasting a total shareholder return of 37% over three years, Old National Bancorp has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Old National Bancorp is currently paying its CEO below what is normal for companies of its size.
Bob Jones receives relatively low remuneration compared to similar sized companies. And while the company isn’t growing earnings per share, total returns have been pleasing. Although we could see higher EPS growth, we’d argue the remuneration is not an issue, based on these observations.
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
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The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.