Mark Grescovich became the CEO of Banner Corporation (NASDAQ:BANR) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Mark Grescovich’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Banner Corporation has a market cap of US$1.9b, and is paying total annual CEO compensation of US$2.5m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$791k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.0m.
A first glance this seems like a real positive for shareholders, since Mark Grescovich is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Banner has changed from year to year.
Is Banner Corporation Growing?
On average over the last three years, Banner Corporation has grown earnings per share (EPS) by 23% each year (using a line of best fit). It achieved revenue growth of 13% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
Has Banner Corporation Been A Good Investment?
Most shareholders would probably be pleased with Banner Corporation for providing a total return of 40% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
It appears that Banner Corporation remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Mark Grescovich deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Banner shares (free trial).
Important note: Banner may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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