Randy Eslick became the CEO of Bank of Commerce Holdings (NASDAQ:BOCH) in 2013, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Bank of Commerce Holdings.
Comparing Bank of Commerce Holdings’ CEO Compensation With the industry
Our data indicates that Bank of Commerce Holdings has a market capitalization of US$121m, and total annual CEO compensation was reported as US$703k for the year to December 2019. Notably, that’s a decrease of 9.2% over the year before. Notably, the salary which is US$440.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$635k. From this we gather that Randy Eslick is paid around the median for CEOs in the industry. What’s more, Randy Eslick holds US$386k worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. Bank of Commerce Holdings pays out 63% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Bank of Commerce Holdings’ Growth Numbers
Bank of Commerce Holdings’s earnings per share (EPS) grew 5.7% per year over the last three years. It saw its revenue drop 3.3% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It’s hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what’s coming up next but if you want to peer into the company’s future you might be interested in this free visualization of analyst forecasts.
Has Bank of Commerce Holdings Been A Good Investment?
With a three year total loss of 26% for the shareholders, Bank of Commerce Holdings would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Bank of Commerce Holdings is currently paying a compensation that’s close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn’t look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. Although we wouldn’t say CEO compensation is exceptionally high, it isn’t very low either. Shareholders might want to see substantial improvements in returns before agreeing that Randy deserves a raise.
CEO compensation is an important area to keep your eyes on, but we’ve also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Bank of Commerce Holdings you should be aware of, and 1 of them shouldn’t be ignored.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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