How Does Carver Bancorp's (NASDAQ:CARV) CEO Salary Compare to Peers?

Michael Pugh has been the CEO of Carver Bancorp, Inc. (NASDAQ:CARV) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Carver Bancorp

How Does Total Compensation For Michael Pugh Compare With Other Companies In The Industry?

At the time of writing, our data shows that Carver Bancorp, Inc. has a market capitalization of US$19m, and reported total annual CEO compensation of US$385k for the year to March 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at US$378.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$511k. This suggests that Carver Bancorp remunerates its CEO largely in line with the industry average. Furthermore, Michael Pugh directly owns US$190k worth of shares in the company.

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. Carver Bancorp pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Carver Bancorp, Inc.'s Growth Numbers

Carver Bancorp, Inc. has reduced its earnings per share by 44% a year over the last three years. In the last year, its revenue changed by just 0.6%.

The decline in EPS is a bit concerning. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Carver Bancorp, Inc. Been A Good Investment?

We think that the total shareholder return of 86%, over three years, would leave most Carver Bancorp, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Carver Bancorp pays its CEO a majority of compensation through a salary. As previously discussed, Michael is compensated close to the median for companies of its size, and which belong to the same industry. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. On the other hand, shareholder returns are showing positive trends over the same time frame. We do not think CEO compensation is a problem, but shrinking EPS is undoubtedly an issue that will have to be addressed.

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. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Carver Bancorp we think you should know about.

Switching gears from Carver 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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