Stock Analysis

Shareholders Will Probably Hold Off On Increasing First Community Corporation's (NASDAQ:FCCO) CEO Compensation For The Time Being

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In the past three years, shareholders of First Community Corporation (NASDAQ:FCCO) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 19 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for First Community

Comparing First Community Corporation's CEO Compensation With the industry

Our data indicates that First Community Corporation has a market capitalization of US$140m, and total annual CEO compensation was reported as US$849k for the year to December 2020. That's a notable increase of 26% on last year. Notably, the salary which is US$447.8k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$573k. This suggests that Mike Crapps is paid more than the median for the industry. Moreover, Mike Crapps also holds US$1.5m worth of First Community stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$448k US$431k 53%
Other US$401k US$241k 47%
Total CompensationUS$849k US$672k100%

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. According to our research, First Community has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

NasdaqCM:FCCO CEO Compensation May 13th 2021

First Community Corporation's Growth

First Community Corporation's earnings per share (EPS) grew 18% per year over the last three years. In the last year, its revenue is up 8.2%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has First Community Corporation Been A Good Investment?

With a three year total loss of 15% for the shareholders, First Community Corporation would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at First Community.

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