In 2010 Peter Ho was appointed CEO of Bank of Hawaii Corporation (NYSE:BOH). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Peter Ho’s Compensation Compare With Similar Sized Companies?
According to our data, Bank of Hawaii Corporation has a market capitalization of US$3.4b, and paid its CEO total annual compensation worth US$5.2m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$795k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
So Peter Ho receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Bank of Hawaii has changed from year to year.
Is Bank of Hawaii Corporation Growing?
On average over the last three years, Bank of Hawaii Corporation has grown earnings per share (EPS) by 10% each year (using a line of best fit). It achieved revenue growth of 4.4% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Bank of Hawaii Corporation Been A Good Investment?
With a total shareholder return of 24% over three years, Bank of Hawaii Corporation shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Peter Ho is paid around what is normal the leaders of comparable size companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. As a result of these considerations, I would suggest the CEO pay is reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Bank of Hawaii (free visualization of insider trades).
If you want to buy a stock that is better than Bank of Hawaii, this free list of high return, low debt companies is a great place to look.
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