Is Unity Bancorp, Inc.'s (NASDAQ:UNTY) CEO Overpaid Relative To Its Peers?
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Jim Hughes has been the CEO of Unity Bancorp, Inc. (NASDAQ:UNTY) since 2004. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Unity Bancorp
How Does Jim Hughes's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Unity Bancorp, Inc. has a market cap of US$231m, and is paying total annual CEO compensation of US$2.6m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$470k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.
Thus we can conclude that Jim Hughes receives more in total compensation than the median of a group of companies in the same market, and of similar size to Unity Bancorp, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Unity Bancorp has changed over time.
Is Unity Bancorp, Inc. Growing?
Unity Bancorp, Inc. has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 12%.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Unity Bancorp, Inc. Been A Good Investment?
Boasting a total shareholder return of 93% over three years, Unity Bancorp, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
We compared total CEO remuneration at Unity Bancorp, Inc. 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Unity Bancorp shares with their own money (free access).
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.
