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Richard Gavegnano has been the CEO of Meridian Bancorp, Inc. (NASDAQ:EBSB) since 2007. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Richard Gavegnano's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Meridian Bancorp, Inc. has a market cap of US$907m, and is paying total annual CEO compensation of US$1.7m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$845k. 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$2.7m.
Most shareholders would consider it a positive that Richard Gavegnano 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 Meridian Bancorp, below.
Is Meridian Bancorp, Inc. Growing?
On average over the last three years, Meridian Bancorp, Inc. has grown earnings per share (EPS) by 25% each year (using a line of best fit). Its revenue is up 2.6% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Meridian Bancorp, Inc. Been A Good Investment?
Meridian Bancorp, Inc. has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Meridian Bancorp, Inc. is currently paying its CEO below what is normal for companies of its size. Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that Richard Gavegnano is paid too much.
It's good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Meridian Bancorp shares (free trial).
Important note: Meridian 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.
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 email@example.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.