This Is Why Atlantic Capital Bancshares, Inc.'s (NASDAQ:ACBI) CEO Compensation Looks Appropriate

By
Simply Wall St
Published
May 13, 2021
NasdaqGS:ACBI
Source: Shutterstock

CEO Doug Williams has done a decent job of delivering relatively good performance at Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) recently. As shareholders go into the upcoming AGM on 20 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Atlantic Capital Bancshares

Comparing Atlantic Capital Bancshares, Inc.'s CEO Compensation With the industry

According to our data, Atlantic Capital Bancshares, Inc. has a market capitalization of US$553m, and paid its CEO total annual compensation worth US$899k over the year to December 2020. That is, the compensation was roughly the same as last year. In particular, the salary of US$468.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.1m. This suggests that Atlantic Capital Bancshares remunerates its CEO largely in line with the industry average. Moreover, Doug Williams also holds US$6.9m worth of Atlantic Capital Bancshares stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$468k US$465k 52%
Other US$431k US$460k 48%
Total CompensationUS$899k US$925k100%

On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. Atlantic Capital Bancshares pays out 52% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
NasdaqGS:ACBI CEO Compensation May 14th 2021

Atlantic Capital Bancshares, Inc.'s Growth

Atlantic Capital Bancshares, Inc. has seen its earnings per share (EPS) increase by 44% a year over the past three years. Its revenue is up 17% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Atlantic Capital Bancshares, Inc. Been A Good Investment?

With a total shareholder return of 31% over three years, Atlantic Capital Bancshares, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Atlantic Capital Bancshares that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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