David Becker has been the CEO of First Internet Bancorp (NASDAQ:INBK) since 2005. 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.
How Does David Becker’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that First Internet Bancorp has a market cap of US$235m, and reported total annual CEO compensation of US$1.5m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$700k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.
Thus we can conclude that David Becker receives more in total compensation than the median of a group of companies in the same market, and of similar size to First Internet Bancorp. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at First Internet Bancorp has changed over time.
Is First Internet Bancorp Growing?
First Internet Bancorp saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. It achieved revenue growth of 2.3% over the last year.
In the last three years the company has failed to grow earnings per share. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has First Internet Bancorp Been A Good Investment?
With a three year total loss of 20%, First Internet Bancorp would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount First Internet Bancorp pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if First Internet Bancorp insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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