Shareholders Will Probably Be Cautious Of Increasing Enterprise Bancorp, Inc.'s (NASDAQ:EBTC) CEO Compensation At The Moment

By
Simply Wall St
Published
April 29, 2021
NasdaqGS:EBTC

CEO Jack Clancy has done a decent job of delivering relatively good performance at Enterprise Bancorp, Inc. (NASDAQ:EBTC) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 04 May 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Enterprise Bancorp

Comparing Enterprise Bancorp, Inc.'s CEO Compensation With the industry

Our data indicates that Enterprise Bancorp, Inc. has a market capitalization of US$411m, and total annual CEO compensation was reported as US$1.0m for the year to December 2020. We note that's a small decrease of 3.2% on last year. We note that the salary of US$525.9k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.1m. This suggests that Enterprise Bancorp remunerates its CEO largely in line with the industry average. Furthermore, Jack Clancy directly owns US$5.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$526k US$517k 51%
Other US$511k US$555k 49%
Total CompensationUS$1.0m US$1.1m100%

On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. Enterprise Bancorp is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
NasdaqGS:EBTC CEO Compensation April 29th 2021

A Look at Enterprise Bancorp, Inc.'s Growth Numbers

Enterprise Bancorp, Inc.'s earnings per share (EPS) grew 21% per year over the last three years. It achieved revenue growth of 15% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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?

With a total shareholder return of 1.3% over three years, Enterprise Bancorp, Inc. has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

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 2 warning signs for Enterprise Bancorp that you should be aware of before investing.

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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