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Should You Worry About Carolina Financial Corporation’s (NASDAQ:CARO) CEO Pay?

In 2012 Jerry Rexroad was appointed CEO of Carolina Financial Corporation (NASDAQ:CARO). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Carolina Financial

How Does Jerry Rexroad’s Compensation Compare With Similar Sized Companies?

According to our data, Carolina Financial Corporation has a market capitalization of US$723m, and pays its CEO total annual compensation worth US$1.3m. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$495k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.3m.

Most shareholders would consider it a positive that Jerry Rexroad takes less 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.

You can see, below, how CEO compensation at Carolina Financial has changed over time.

NasdaqCM:CARO CEO Compensation December 13th 18

Is Carolina Financial Corporation Growing?

Carolina Financial Corporation has increased its earnings per share (EPS) by an average of 10% a year, over the last three years In the last year, its revenue is up 64%.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Carolina Financial Corporation Been A Good Investment?

Most shareholders would probably be pleased with Carolina Financial Corporation for providing a total return of 101% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Carolina Financial Corporation is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Jerry Rexroad deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Carolina Financial shares with their own money (free access).

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.