Increases to CF Bankshares Inc.'s (NASDAQ:CFBK) CEO Compensation Might Cool off for now

Key Insights

• CF Bankshares will host its Annual General Meeting on 29th of May
• CEO Tim O’Dell's total compensation includes salary of US$500.0k
• The total compensation is 69% higher than the average for the industry
• Over the past three years, CF Bankshares' EPS fell by 22% and over the past three years, the total shareholder return was 3.6%

The anaemic share price growth at CF Bankshares Inc. (NASDAQ:CFBK) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. Some of these issues will occupy shareholders' minds as the AGM rolls around on 29th of May. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for CF Bankshares

Comparing CF Bankshares Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that CF Bankshares Inc. has a market capitalization of US$122m, and reported total annual CEO compensation of US$1.1m for the year to December 2023. We note that's a decrease of 18% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.

In comparison with other companies in the American Banks industry with market capitalizations under US$200m, the reported median total CEO compensation was US$639k. Hence, we can conclude that Tim O’Dell is remunerated higher than the industry median. What's more, Tim O’Dell holds US$5.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$500k	US$475k	46%
Other	US$580k	US$835k	54%
Total Compensation	US$1.1m	US$1.3m	100%

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Although there is a difference in how total compensation is set, CF Bankshares more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at CF Bankshares Inc.'s Growth Numbers

Over the last three years, CF Bankshares Inc. has shrunk its earnings per share by 22% per year. It saw its revenue drop 10% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 CF Bankshares Inc. Been A Good Investment?

CF Bankshares Inc. has not done too badly by shareholders, with a total return of 3.6%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

Shareholders may want to check for free if CF Bankshares insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.