Shareholders May Find It Hard To Justify Increasing Bank of Marin Bancorp's (NASDAQ:BMRC) CEO Compensation For Now

In the past three years, shareholders of Bank of Marin Bancorp (NASDAQ:BMRC) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 11 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Bank of Marin Bancorp

Comparing Bank of Marin Bancorp's CEO Compensation With the industry

At the time of writing, our data shows that Bank of Marin Bancorp has a market capitalization of US$471m, and reported total annual CEO compensation of US$1.1m for the year to December 2020. We note that's a small decrease of 3.2% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$489k.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.1m. From this we gather that Russ Colombo is paid around the median for CEOs in the industry. What's more, Russ Colombo holds US$2.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$489k	US$478k	43%
Other	US$648k	US$697k	57%
Total Compensation	US$1.1m	US$1.2m	100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. Bank of Marin Bancorp is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Bank of Marin Bancorp's Growth Numbers

Bank of Marin Bancorp has seen its earnings per share (EPS) increase by 19% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Bank of Marin Bancorp Been A Good Investment?

Since shareholders would have lost about 1.7% over three years, some Bank of Marin Bancorp investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

Shareholders may want to check for free if Bank of Marin Bancorp insiders are buying or selling shares.

Important note: Bank of Marin Bancorp 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. 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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