Most Shareholders Will Probably Find That The CEO Compensation For The First Bancshares, Inc. (NASDAQ:FBMS) Is Reasonable

By
Simply Wall St
Published
May 13, 2021
NasdaqGM:FBMS
Source: Shutterstock

CEO Hoppy Cole has done a decent job of delivering relatively good performance at The First Bancshares, Inc. (NASDAQ:FBMS) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 20 May 2021. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for First Bancshares

How Does Total Compensation For Hoppy Cole Compare With Other Companies In The Industry?

According to our data, The First Bancshares, Inc. has a market capitalization of US$808m, and paid its CEO total annual compensation worth US$1.6m over the year to December 2020. That's a notable increase of 44% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$523k.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$1.6m. So it looks like First Bancshares compensates Hoppy Cole in line with the median for the industry. What's more, Hoppy Cole holds US$3.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$523k US$469k 33%
Other US$1.1m US$635k 67%
Total CompensationUS$1.6m US$1.1m100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. It's interesting to note that First Bancshares allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NasdaqGM:FBMS CEO Compensation May 14th 2021

The First Bancshares, Inc.'s Growth

The First Bancshares, Inc. has seen its earnings per share (EPS) increase by 29% a year over the past three years. In the last year, its revenue is up 20%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The First Bancshares, Inc. Been A Good Investment?

The First Bancshares, Inc. has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

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. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for First Bancshares (1 doesn't sit too well with us!) that you should be aware of before investing here.

Important note: First Bancshares 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. 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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