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In 2014 Tom Coughlin was appointed CEO of BCB Bancorp, Inc. (NASDAQ:BCBP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Tom Coughlin's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that BCB Bancorp, Inc. has a market cap of US$198m, and reported total annual CEO compensation of US$568k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$455k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.2m.
Most shareholders would consider it a positive that Tom Coughlin takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at BCB Bancorp has changed from year to year.
Is BCB Bancorp, Inc. Growing?
Over the last three years BCB Bancorp, Inc. has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). It achieved revenue growth of 9.4% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has BCB Bancorp, Inc. Been A Good Investment?
Since shareholders would have lost about 21% over three years, some BCB Bancorp, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that BCB Bancorp, Inc. remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we don't think, Tom Coughlin is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at BCB Bancorp.
Important note: BCB Bancorp may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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