Brad Kessel became the CEO of Independent Bank Corporation (NASDAQ:IBCP) in 2013. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Brad Kessel’s Compensation Compare With Similar Sized Companies?
According to our data, Independent Bank Corporation has a market capitalization of US$441m, and pays its CEO total annual compensation worth US$1.1m. (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$480k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.9m.
A first glance this seems like a real positive for shareholders, since Brad Kessel is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Independent Bank has changed from year to year.
Is Independent Bank Corporation Growing?
On average over the last three years, Independent Bank Corporation has grown earnings per share (EPS) by 20% each year (using a line of best fit). It achieved revenue growth of 12% 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.
Has Independent Bank Corporation Been A Good Investment?
Independent Bank Corporation has generated a total shareholder return of 30% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that Independent Bank Corporation remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn’t mean that Brad Kessel 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. Shareholders may want to check for free if Independent Bank insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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