How Should Investors React To German American Bancorp, Inc.'s (NASDAQ:GABC) CEO Pay?
Mark Schroeder has been the CEO of German American Bancorp, Inc. (NASDAQ:GABC) since 1999. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for German American Bancorp
How Does Mark Schroeder's Compensation Compare With Similar Sized Companies?
Our data indicates that German American Bancorp, Inc. is worth US$782m, and total annual CEO compensation is US$989k. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$390k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.
Most shareholders would consider it a positive that Mark Schroeder takes less total 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 a visual representation of the CEO compensation at German American Bancorp, below.
Is German American Bancorp, Inc. Growing?
German American Bancorp, Inc. has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). It achieved revenue growth of 20% over the last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has German American Bancorp, Inc. Been A Good Investment?
Boasting a total shareholder return of 38% over three years, German American Bancorp, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
It appears that German American Bancorp, Inc. remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Mark Schroeder deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling German American Bancorp (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
