Should You Worry About First Midwest Bancorp, Inc.’s (NASDAQ:FMBI) CEO Pay Cheque?
In 2008 Mike Scudder was appointed CEO of First Midwest Bancorp, Inc. (NASDAQ:FMBI). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Mike Scudder’s Compensation Compare With Similar Sized Companies?
According to our data, First Midwest Bancorp, Inc. has a market capitalization of US$2.4b, and pays its CEO total annual compensation worth US$3.4m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$846k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO compensation of that group was US$3.5m.
So Mike Scudder receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at First Midwest Bancorp has changed over time.
Is First Midwest Bancorp, Inc. Growing?
First Midwest Bancorp, Inc. has increased its earnings per share (EPS) by an average of 5.7% a year, over the last three years (using a line of best fit). It achieved revenue growth of 1.6% over the last year.
I’d prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors I’d say performance has been pretty decent, though not amazing.
You might want to check this free visual report on analyst forecasts for future earnings.
Has First Midwest Bancorp, Inc. Been A Good Investment?
Boasting a total shareholder return of 39% over three years, First Midwest Bancorp, 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…
Remuneration for Mike Scudder is close enough to the median pay for a CEO of a similar sized company .
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So we can conclude that on this analysis the CEO compensation seems pretty sound. So you may want to check if insiders are buying First Midwest Bancorp shares with their own money (free access).
Or you might rather take a peek at this analytical visualization of historic cash flow, 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.
