Ken Mahon became the CEO of Dime Community Bancshares, Inc. (NASDAQ:DCOM) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Ken Mahon’s Compensation Compare With Similar Sized Companies?
Our data indicates that Dime Community Bancshares, Inc. is worth US$489m, and total annual CEO compensation was reported as US$1.9m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$825k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$2.1m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Dime Community Bancshares. On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. Dime Community Bancshares does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
So Ken Mahon is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at Dime Community Bancshares has changed over time.
Is Dime Community Bancshares, Inc. Growing?
On average over the last three years, Dime Community Bancshares, Inc. has shrunk earnings per share by 3.3% each year (measured with a line of best fit). Its revenue is down 7.4% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Dime Community Bancshares, Inc. Been A Good Investment?
Since shareholders would have lost about 21% over three years, some Dime Community Bancshares, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Ken Mahon is paid around what is normal for the leaders of comparable size companies.
After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Moving away from CEO compensation for the moment, we’ve identified 1 warning sign for Dime Community Bancshares that you should be aware of before investing.
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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