Is Eagle Bancorp Montana, Inc. (NASDAQ:EBMT) Overpaying Its CEO?

By
Simply Wall St
Published
July 29, 2019
NasdaqGM:EBMT

Pete Johnson has been the CEO of Eagle Bancorp Montana, Inc. (NASDAQ:EBMT) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Eagle Bancorp Montana

How Does Pete Johnson's Compensation Compare With Similar Sized Companies?

Our data indicates that Eagle Bancorp Montana, Inc. is worth US$91m, and total annual CEO compensation is US$497k. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$275k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$470k.

So Pete Johnson receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Eagle Bancorp Montana, below.

NasdaqGM:EBMT CEO Compensation, July 29th 2019
NasdaqGM:EBMT CEO Compensation, July 29th 2019

Is Eagle Bancorp Montana, Inc. Growing?

On average over the last three years, Eagle Bancorp Montana, Inc. has shrunk earnings per share by 7.6% each year (measured with a line of best fit). Its revenue is up 27% over last year.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching.

Has Eagle Bancorp Montana, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Eagle Bancorp Montana, Inc. for providing a total return of 34% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Remuneration for Pete Johnson is close enough to the median pay for a CEO of a similar sized company .

While the growth could be better, the shareholder returns are clearly good. So we can conclude that on this analysis the CEO compensation seems pretty sound. Whatever your view on compensation, you might want to check if insiders are buying or selling Eagle Bancorp Montana shares (free trial).

If you want to buy a stock that is better than Eagle Bancorp Montana, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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