Does American River Bankshares' (NASDAQ:AMRB) CEO Salary Compare Well With Industry Peers?

By
Simply Wall St
Published
October 01, 2020
NasdaqGS:AMRB

This article will reflect on the compensation paid to Dave Ritchie who has served as CEO of American River Bankshares (NASDAQ:AMRB) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for American River Bankshares

How Does Total Compensation For Dave Ritchie Compare With Other Companies In The Industry?

At the time of writing, our data shows that American River Bankshares has a market capitalization of US$59m, and reported total annual CEO compensation of US$527k for the year to December 2019. We note that's a decrease of 10% compared to last year. We note that the salary portion, which stands at US$274.9k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$640k. From this we gather that Dave Ritchie is paid around the median for CEOs in the industry. Furthermore, Dave Ritchie directly owns US$303k worth of shares in the company.

Component20192018Proportion (2019)
Salary US$275k US$265k 52%
Other US$252k US$323k 48%
Total CompensationUS$527k US$588k100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. According to our research, American River Bankshares has allocated a higher percentage of pay to salary in comparison to the wider industry. 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:AMRB CEO Compensation October 1st 2020

A Look at American River Bankshares' Growth Numbers

Over the past three years, American River Bankshares has seen its earnings per share (EPS) grow by 3.9% per year. Its revenue is up 8.7% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has American River Bankshares Been A Good Investment?

Since shareholders would have lost about 26% over three years, some American River Bankshares investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, American River Bankshares is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for American River Bankshares you should be aware of, and 1 of them is a bit concerning.

Switching gears from American River Bankshares, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. 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.
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