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Performance at Meridian Bancorp, Inc. (NASDAQ:EBSB) has been reasonably good and CEO Richard Gavegnano has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 19 May 2021. We present our case of why we think CEO compensation looks fair.
How Does Total Compensation For Richard Gavegnano Compare With Other Companies In The Industry?
At the time of writing, our data shows that Meridian Bancorp, Inc. has a market capitalization of US$1.1b, and reported total annual CEO compensation of US$2.3m for the year to December 2020. We note that's an increase of 49% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$975k.
For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$1.8m. From this we gather that Richard Gavegnano is paid around the median for CEOs in the industry. What's more, Richard Gavegnano holds US$21m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. Meridian Bancorp sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Meridian Bancorp, Inc.'s Growth
Meridian Bancorp, Inc.'s earnings per share (EPS) grew 20% per year over the last three years. In the last year, its revenue is up 6.3%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Meridian Bancorp, Inc. Been A Good Investment?
Meridian Bancorp, Inc. has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Meridian Bancorp (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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