Shareholders May Be Wary Of Increasing BankFinancial Corporation's (NASDAQ:BFIN) CEO Compensation Package

The results at BankFinancial Corporation (NASDAQ:BFIN) have been quite disappointing recently and CEO F. Gasior bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28 May 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for BankFinancial

How Does Total Compensation For F. Gasior Compare With Other Companies In The Industry?

According to our data, BankFinancial Corporation has a market capitalization of US$156m, and paid its CEO total annual compensation worth US$602k over the year to December 2020. That's a modest increase of 5.2% on the prior year. In particular, the salary of US$521.1k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$763k. From this we gather that F. Gasior is paid around the median for CEOs in the industry. Moreover, F. Gasior also holds US$3.3m worth of BankFinancial stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$521k	US$462k	87%
Other	US$81k	US$110k	13%
Total Compensation	US$602k	US$572k	100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. According to our research, BankFinancial 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.

BankFinancial Corporation's Growth

Over the last three years, BankFinancial Corporation has shrunk its earnings per share by 2.1% per year. It saw its revenue drop 3.8% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has BankFinancial Corporation Been A Good Investment?

Few BankFinancial Corporation shareholders would feel satisfied with the return of -33% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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

Switching gears from BankFinancial, 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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