Stock Analysis

How Much Did City Holding's (NASDAQ:CHCO) CEO Pocket Last Year?

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This article will reflect on the compensation paid to Skip Hageboeck who has served as CEO of City Holding Company (NASDAQ:CHCO) since 2005. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for City Holding.

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How Does Total Compensation For Skip Hageboeck Compare With Other Companies In The Industry?

Our data indicates that City Holding Company has a market capitalization of US$1.1b, and total annual CEO compensation was reported as US$1.6m for the year to December 2019. Notably, that's an increase of 17% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$637k.

In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$1.8m. From this we gather that Skip Hageboeck is paid around the median for CEOs in the industry. Moreover, Skip Hageboeck also holds US$3.5m worth of City Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary US$637k US$619k 41%
Other US$916k US$709k 59%
Total CompensationUS$1.6m US$1.3m100%

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. City Holding is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NasdaqGS:CHCO CEO Compensation December 26th 2020

A Look at City Holding Company's Growth Numbers

City Holding Company's earnings per share (EPS) grew 13% per year over the last three years. In the last year, its revenue is up 2.0%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has City Holding Company Been A Good Investment?

With a total shareholder return of 13% over three years, City Holding Company shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As previously discussed, Skip is compensated close to the median for companies of its size, and which belong to the same industry. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for City Holding (1 is a bit unpleasant!) that you should be aware of before investing here.

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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