Affinity Bancshares, Inc.'s (NASDAQ:AFBI) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Affinity Bancshares will host its Annual General Meeting on 20th of May
• CEO Ed Cooney's total compensation includes salary of US$450.0k
• Total compensation is similar to the industry average
• Over the past three years, Affinity Bancshares' EPS fell by 3.8% and over the past three years, the total shareholder return was 39%

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Despite strong share price growth of 39% for Affinity Bancshares, Inc. (NASDAQ:AFBI) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 20th of May. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Affinity Bancshares

How Does Total Compensation For Ed Cooney Compare With Other Companies In The Industry?

Our data indicates that Affinity Bancshares, Inc. has a market capitalization of US$117m, and total annual CEO compensation was reported as US$661k for the year to December 2024. We note that's a small decrease of 6.4% on last year. Notably, the salary which is US$450.0k, represents most of the total compensation being paid.

For comparison, other companies in the American Banks industry with market capitalizations below US$200m, reported a median total CEO compensation of US$623k. So it looks like Affinity Bancshares compensates Ed Cooney in line with the median for the industry. Furthermore, Ed Cooney directly owns US$2.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 44% of total compensation out of all the companies we analyzed, while other remuneration made up 56% of the pie. According to our research, Affinity Bancshares has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Affinity Bancshares, Inc.'s Growth Numbers

Over the last three years, Affinity Bancshares, Inc. has shrunk its earnings per share by 3.8% per year. Its revenue is up 4.9% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Affinity Bancshares, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Affinity Bancshares, Inc. for providing a total return of 39% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Affinity Bancshares that investors should be aware of in a dynamic business environment.

Important note: Affinity Bancshares 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.