In 2013, Scott Beatty was appointed CEO of Shore Bancshares, Inc. (NASDAQ:SHBI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Scott Beatty’s Compensation Compare With Similar Sized Companies?
According to our data, Shore Bancshares, Inc. has a market capitalization of US$107m, and paid its CEO total annual compensation worth US$740k over the year to December 2019. That’s a notable increase of 20% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$495k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$619k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Shore Bancshares. Speaking on an industry level, we can see that nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Shore Bancshares pays out 67% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.
So Scott Beatty is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Shore Bancshares has changed over time.
Is Shore Bancshares, Inc. Growing?
On average over the last three years, Shore Bancshares, Inc. has seen earnings per share (EPS) move in a favourable direction by 20% each year (using a line of best fit). It achieved revenue growth of 1.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Shore Bancshares, Inc. Been A Good Investment?
Since shareholders would have lost about 41% over three years, some Shore Bancshares, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
Scott Beatty is paid around what is normal for the leaders of comparable size companies.
We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. Shifting gears from CEO pay for a second, we’ve spotted 3 warning signs for Shore Bancshares you should be aware of, and 1 of them doesn’t sit too well with us.
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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