Shareholders May Be Wary Of Increasing Eagle Bancorp, Inc.'s (NASDAQ:EGBN) CEO Compensation Package

Key Insights

• Eagle Bancorp will host its Annual General Meeting on 16th of May
• Total pay for CEO Susan Riel includes US$907.4k salary
• The total compensation is 125% higher than the average for the industry
• Eagle Bancorp's EPS declined by 19% over the past three years while total shareholder loss over the past three years was 57%

Shareholders will probably not be too impressed with the underwhelming results at Eagle Bancorp, Inc. (NASDAQ:EGBN) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 16th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Eagle Bancorp

Comparing Eagle Bancorp, Inc.'s CEO Compensation With The Industry

Our data indicates that Eagle Bancorp, Inc. has a market capitalization of US$597m, and total annual CEO compensation was reported as US$3.2m for the year to December 2023. Notably, that's a decrease of 28% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$907k.

For comparison, other companies in the American Banks industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.4m. Accordingly, our analysis reveals that Eagle Bancorp, Inc. pays Susan Riel north of the industry median. What's more, Susan Riel holds US$7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$907k	US$856k	28%
Other	US$2.3m	US$3.6m	72%
Total Compensation	US$3.2m	US$4.4m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. It's interesting to note that Eagle Bancorp allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

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

Over the last three years, Eagle Bancorp, Inc. has shrunk its earnings per share by 19% per year. It saw its revenue drop 25% over the last year.

Overall this is not a very positive result for shareholders. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Eagle Bancorp, Inc. Been A Good Investment?

With a total shareholder return of -57% over three years, Eagle Bancorp, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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. We've identified 2 warning signs for Eagle Bancorp that investors should be aware of in a dynamic business environment.

Important note: Eagle Bancorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.