In 2017 Joe Schierhorn was appointed CEO of Northrim BanCorp, Inc. (NASDAQ:NRIM). 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Joe Schierhorn’s Compensation Compare With Similar Sized Companies?
Our data indicates that Northrim BanCorp, Inc. is worth US$246m, and total annual CEO compensation was reported as US$771k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$389k. 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.
Most shareholders would consider it a positive that Joe Schierhorn 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. Although we don’t have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
You can see, below, how CEO compensation at Northrim BanCorp has changed over time.
Is Northrim BanCorp, Inc. Growing?
On average over the last three years, Northrim BanCorp, Inc. has grown earnings per share (EPS) by 13% each year (using a line of best fit). It achieved revenue growth of 17% over the last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
Has Northrim BanCorp, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Northrim BanCorp, Inc. for providing a total return of 33% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Northrim BanCorp, Inc. is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Joe Schierhorn 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. Whatever your view on compensation, you might want to check if insiders are buying or selling Northrim BanCorp shares (free trial).
Important note: Northrim 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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