Bill Harrod has been the CEO of First Capital, Inc. (NASDAQ:FCAP) since 2000. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Bill Harrod’s Compensation Compare With Similar Sized Companies?
Our data indicates that First Capital, Inc. is worth US$190m, and total annual CEO compensation is US$368k. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$220k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at First Capital has changed from year to year.
Is First Capital, Inc. Growing?
On average over the last three years, First Capital, Inc. has grown earnings per share (EPS) by 15% each year (using a line of best fit). In the last year, its revenue is up 7.3%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.
Has First Capital, Inc. Been A Good Investment?
I think that the total shareholder return of 81%, over three years, would leave most First Capital, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It appears that First Capital, Inc. remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Bill Harrod deserves a raise!
It’s not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. Shareholders may want to check for free if First Capital insiders are buying or selling shares.
Important note: First Capital may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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