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Tim O’Dell became the CEO of Central Federal Corporation (NASDAQ:CFBK) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Tim O’Dell Compare With Other Companies In The Industry?
Our data indicates that Central Federal Corporation has a market capitalization of US$53m, and total annual CEO compensation was reported as US$834k for the year to December 2019. We note that's an increase of 12% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$315k.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$508k. This suggests that Tim O’Dell is paid more than the median for the industry. What's more, Tim O’Dell holds US$2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. Central Federal pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Central Federal Corporation's Growth
Central Federal Corporation has seen its earnings per share (EPS) increase by 87% a year over the past three years. Its revenue is up 57% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Central Federal Corporation Been A Good Investment?
With a three year total loss of 12% for the shareholders, Central Federal Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Tim is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company has impressed with its earnings per share growth, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Central Federal that you should be aware of before investing.
Important note: Central Federal 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.
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