Shareholders Will Probably Hold Off On Increasing Sierra Bancorp's (NASDAQ:BSRR) CEO Compensation For The Time Being

Performance at Sierra Bancorp (NASDAQ:BSRR) has been reasonably good and CEO Kevin McPhaill has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 27 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Sierra Bancorp

Comparing Sierra Bancorp's CEO Compensation With the industry

According to our data, Sierra Bancorp has a market capitalization of US$417m, and paid its CEO total annual compensation worth US$1.7m over the year to December 2020. That's a notable increase of 63% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$575k.

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. Accordingly, our analysis reveals that Sierra Bancorp pays Kevin McPhaill north of the industry median. What's more, Kevin McPhaill holds US$1.4m worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	US$575k	US$525k	33%
Other	US$1.2m	US$538k	67%
Total Compensation	US$1.7m	US$1.1m	100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. In Sierra Bancorp's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sierra Bancorp's Growth Numbers

Sierra Bancorp has seen its earnings per share (EPS) increase by 19% a year over the past three years. In the last year, its revenue is up 11%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Sierra Bancorp Been A Good Investment?

Sierra Bancorp has generated a total shareholder return of 2.9% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Sierra Bancorp that investors should look into moving forward.

Switching gears from Sierra Bancorp, 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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