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Should You Worry About First Capital, Inc.'s (NASDAQ:FCAP) CEO Pay Cheque?

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Bill Harrod became the CEO of First Capital, Inc. (NASDAQ:FCAP) in 2000. First, this article will compare CEO compensation with compensation at similar sized companies. 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 First Capital

How Does Bill Harrod's Compensation Compare With Similar Sized Companies?

Our data indicates that First Capital, Inc. is worth US$188m, and total annual CEO compensation was reported as US$393k for the year to December 2019. Notably, that's an increase of 17% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$230k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.4m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. First Capital is paying a higher share of its remuneration through a salary in comparison to the overall industry.

Most shareholders would consider it a positive that Bill Harrod 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 First Capital, below.

NasdaqCM:FCAP CEO Compensation May 19th 2020
NasdaqCM:FCAP CEO Compensation May 19th 2020

Is First Capital, Inc. Growing?

On average over the last three years, First Capital, Inc. has seen earnings per share (EPS) move in a favourable direction by 15% each year (using a line of best fit). It achieved revenue growth of 8.7% 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. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has First Capital, Inc. Been A Good Investment?

Boasting a total shareholder return of 86% over three years, First Capital, Inc. has done well by shareholders. 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 First Capital, Inc. pays its CEO less than similar sized companies.

Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Bill Harrod 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. Shareholders may want to check for free if First Capital insiders are buying or selling shares.

Important note: First Capital 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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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. Thank you for reading.