Joe Schierhorn became the CEO of Northrim BanCorp, Inc. (NASDAQ:NRIM) in 2017, 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 Northrim BanCorp.
See our latest analysis for Northrim BanCorp
How Does Total Compensation For Joe Schierhorn Compare With Other Companies In The Industry?
According to our data, Northrim BanCorp, Inc. has a market capitalization of US$142m, and paid its CEO total annual compensation worth US$811k over the year to December 2019. That’s a fairly small increase of 5.2% over the previous year. Notably, the salary which is US$411.3k, 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$654k. From this we gather that Joe Schierhorn is paid around the median for CEOs in the industry. Furthermore, Joe Schierhorn directly owns US$859k worth of shares in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$411k | US$389k | 51% |
| Other | US$400k | US$383k | 49% |
| Total Compensation | US$811k | US$771k | 100% |
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Northrim BanCorp pays out 51% 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 Northrim BanCorp, Inc.’s Growth Numbers
Northrim BanCorp, Inc.’s earnings per share (EPS) grew 6.9% per year over the last three years. Its revenue is up 4.4% over the last year.
We would argue that the improvement in revenue is good, but isn’t particularly impressive, but the modest improvement in EPS is good. Considering these factors we’d say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has Northrim BanCorp, Inc. Been A Good Investment?
Given the total shareholder loss of 17% over three years, many shareholders in Northrim BanCorp, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary…
As previously discussed, Joe is compensated close to the median for companies of its size, and which belong to the same industry. This doesn’t look good when you place it against the backdrop of negative shareholder returns and flat earnings growth. CEO pay isn’t exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company’s key performance areas. That’s why we did our research, and identified 3 warning signs for Northrim BanCorp (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Northrim BanCorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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