Is The First Bancorp, Inc.’s (NASDAQ:FNLC) CEO Overpaid Relative To Its Peers?

Tony McKim has been the CEO of The First Bancorp, Inc. (NASDAQ:FNLC) since 2015. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for First Bancorp

How Does Tony McKim’s Compensation Compare With Similar Sized Companies?

Our data indicates that The First Bancorp, Inc. is worth US$330m, and total annual CEO compensation was reported as US$858k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$520k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.7m.

A first glance this seems like a real positive for shareholders, since Tony McKim is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.

You can see, below, how CEO compensation at First Bancorp has changed over time.

NasdaqGS:FNLC CEO Compensation, January 1st 2020
NasdaqGS:FNLC CEO Compensation, January 1st 2020

Is The First Bancorp, Inc. Growing?

The First 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). Its revenue is up 6.9% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has The First Bancorp, Inc. Been A Good Investment?

The First Bancorp, Inc. has generated a total shareholder return of 6.2% over three years, so most shareholders wouldn’t be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

It looks like The First Bancorp, Inc. pays its CEO less than similar sized companies.

Considering the underlying business is growing earnings, this would suggest the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Tony McKim is overcompensated. It’s good to see reasonable payment of the CEO, even while the business improves. But it would be nice if insiders were also buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling First Bancorp (free visualization of insider trades).

If you want to buy a stock that is better than First Bancorp, this free list of high return, low debt companies is a great place to look.

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.

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