How Much Does Enterprise Bancorp's (NASDAQ:EBTC) CEO Make?

Jack Clancy became the CEO of Enterprise Bancorp, Inc. (NASDAQ:EBTC) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. 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 Enterprise Bancorp

How Does Total Compensation For Jack Clancy Compare With Other Companies In The Industry?

According to our data, Enterprise Bancorp, Inc. has a market capitalization of US$319m, and paid its CEO total annual compensation worth US$1.1m over the year to December 2019. That's just a smallish increase of 6.1% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$517k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.1m. From this we gather that Jack Clancy is paid around the median for CEOs in the industry. What's more, Jack Clancy holds US$4.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Enterprise Bancorp pays out 48% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Enterprise Bancorp, Inc.'s Growth

Enterprise Bancorp, Inc. has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is up 5.0% over the last year.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Enterprise Bancorp, Inc. Been A Good Investment?

Given the total shareholder loss of 17% over three years, many shareholders in Enterprise Bancorp, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Enterprise Bancorp, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Enterprise Bancorp that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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. 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.
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