Should You Worry About Carolina Financial Corporation's (NASDAQ:CARO) CEO Pay Cheque?
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. Then we'll look at a snap shot of the business growth. 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.
Check out our latest analysis for Carolina Financial
How Does Jerry Rexroad's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Carolina Financial Corporation has a market cap of US$757m, and is paying total annual CEO compensation of US$1.3m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$540k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
Most shareholders would consider it a positive that Jerry Rexroad takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Carolina Financial, below.
Is Carolina Financial Corporation Growing?
Over the last three years Carolina Financial Corporation has grown its earnings per share (EPS) by an average of 23% per year (using a line of best fit). Its revenue is up 16% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Carolina Financial Corporation Been A Good Investment?
Most shareholders would probably be pleased with Carolina Financial Corporation for providing a total return of 60% 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...
It looks like Carolina Financial Corporation pays its CEO less than similar sized companies. 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!
It is relatively rare to see a modestly paid CEO when performance is so impressive. 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).
Important note: Carolina Financial 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.
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.
