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Is Sierra Bancorp's (NASDAQ:BSRR) CEO Pay Fair?

Simply Wall St

Kevin McPhaill became the CEO of Sierra Bancorp (NASDAQ:BSRR) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Sierra Bancorp

How Does Kevin McPhaill's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Sierra Bancorp has a market cap of US$376m, and is paying total annual CEO compensation of US$2.8m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$475k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.8m.

As you can see, Kevin McPhaill is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Sierra Bancorp is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Sierra Bancorp has changed over time.

NasdaqGS:BSRR CEO Compensation, September 4th 2019

Is Sierra Bancorp Growing?

On average over the last three years, Sierra Bancorp has grown earnings per share (EPS) by 18% each year (using a line of best fit). Its revenue is up 5.9% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.

Has Sierra Bancorp Been A Good Investment?

I think that the total shareholder return of 46%, over three years, would leave most Sierra Bancorp shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We compared total CEO remuneration at Sierra Bancorp with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sierra Bancorp.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.