Here's Why First Capital, Inc.'s (NASDAQ:FCAP) CEO May Have Their Pay Bumped Up

By
Simply Wall St
Published
May 19, 2021
NasdaqCM:FCAP
Source: Shutterstock

Shareholders will be pleased by the robust performance of First Capital, Inc. (NASDAQ:FCAP) recently and this will be kept in mind in the upcoming AGM on 26 May 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

See our latest analysis for First Capital

How Does Total Compensation For Bill Harrod Compare With Other Companies In The Industry?

At the time of writing, our data shows that First Capital, Inc. has a market capitalization of US$149m, and reported total annual CEO compensation of US$329k for the year to December 2020. We note that's a decrease of 16% compared to last year. Notably, the salary which is US$240.8k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$574k. That is to say, Bill Harrod is paid under the industry median. Furthermore, Bill Harrod directly owns US$687k worth of shares in the company.

Component20202019Proportion (2020)
Salary US$241k US$230k 73%
Other US$88k US$162k 27%
Total CompensationUS$329k US$393k100%

Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. It's interesting to note that First Capital pays out a greater portion of remuneration through salary, compared to the 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
NasdaqCM:FCAP CEO Compensation May 20th 2021

First Capital, Inc.'s Growth

Over the past three years, First Capital, Inc. has seen its earnings per share (EPS) grow by 11% per year. Revenue was pretty flat on last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has First Capital, Inc. Been A Good Investment?

First Capital, Inc. has served shareholders reasonably well, with a total return of 28% over three years. 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.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for First Capital that investors should look into moving forward.

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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