Why Dime Community Bancshares' (NASDAQ:DCOM) CEO Pay Matters
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Ken Mahon has been the CEO of Dime Community Bancshares, Inc. (NASDAQ:DCOM) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Dime Community Bancshares
How Does Total Compensation For Ken Mahon Compare With Other Companies In The Industry?
According to our data, Dime Community Bancshares, Inc. has a market capitalization of US$408m, and paid its CEO total annual compensation worth US$1.8m over the year to December 2019. We note that's a small decrease of 5.5% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$825k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.2m. Hence, we can conclude that Ken Mahon is remunerated higher than the industry median. Moreover, Ken Mahon also holds US$7.1m worth of Dime Community Bancshares stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$825k | US$825k | 45% |
Other | US$1.0m | US$1.1m | 55% |
Total Compensation | US$1.8m | US$1.9m | 100% |
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. There isn't a significant difference between Dime Community Bancshares and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Dime Community Bancshares, Inc.'s Growth Numbers
Over the last three years, Dime Community Bancshares, Inc. has not seen its earnings per share change much, though there is a slight positive movement. In the last year, its revenue is down 5.5%.
We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Dime Community Bancshares, Inc. Been A Good Investment?
Since shareholders would have lost about 35% over three years, some Dime Community Bancshares, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we touched on above, Dime Community Bancshares, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. And the situation doesn't look all that good when you see Ken is remunerated higher than the industry average. All things considered, we believe shareholders would be disappointed to see Ken's compensation grow without first seeing an improvement in the performance of the company.
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 1 warning sign for Dime Community Bancshares that you should be aware of before investing.
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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