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It's Probably Less Likely That Heartland Financial USA, Inc.'s (NASDAQ:HTLF) CEO Will See A Huge Pay Rise This Year

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As many shareholders of Heartland Financial USA, Inc. (NASDAQ:HTLF) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 19 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Heartland Financial USA

How Does Total Compensation For Bruce Lee Compare With Other Companies In The Industry?

At the time of writing, our data shows that Heartland Financial USA, Inc. has a market capitalization of US$2.0b, and reported total annual CEO compensation of US$2.2m for the year to December 2020. Notably, that's an increase of 13% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$731k.

On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$2.4m. This suggests that Heartland Financial USA remunerates its CEO largely in line with the industry average. What's more, Bruce Lee holds US$1.9m worth of shares in the company in their own name.

Component

2020

2019

Proportion (2020)

Salary

US$731k

US$719k

33%

Other

US$1.5m

US$1.3m

67%

Total Compensation

US$2.2m

US$2.0m

100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. Heartland Financial USA pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Heartland Financial USA, Inc.'s Growth Numbers

Heartland Financial USA, Inc.'s earnings per share (EPS) grew 16% per year over the last three years. In the last year, its revenue is up 11%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Heartland Financial USA, Inc. Been A Good Investment?

Since shareholders would have lost about 8.3% over three years, some Heartland Financial USA, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. In our study, we found 4 warning signs for Heartland Financial USA you should be aware of, and 1 of them can't be ignored.

Important note: Heartland Financial USA is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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 (at) simplywallst.com.