Richard Moore became the CEO of First Bancorp (NASDAQ:FBNC) in 2012, 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.
How Does Total Compensation For Richard Moore Compare With Other Companies In The Industry?
At the time of writing, our data shows that First Bancorp has a market capitalization of US$974m, and reported total annual CEO compensation of US$1.1m for the year to December 2019. That's a notable decrease of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$400k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$1.8m. In other words, First Bancorp pays its CEO lower than the industry median. What's more, Richard Moore holds US$3.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that First 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 First Bancorp's Growth Numbers
First Bancorp's earnings per share (EPS) grew 15% per year over the last three years. It saw its revenue drop 5.1% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has First Bancorp Been A Good Investment?
With a three year total loss of 2.1% for the shareholders, First Bancorp would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, First Bancorp pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Importantly though, the company has impressed with its EPS growth over three years. Considering EPS are on the up, we would say Richard is compensated fairly. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for First Bancorp (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: First 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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First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses primarily in North Carolina and northeastern South Carolina.
Very undervalued with flawless balance sheet and pays a dividend.