Shareholders May Be Wary Of Increasing First Interstate BancSystem, Inc.'s (NASDAQ:FIBK) CEO Compensation Package

Key Insights

• First Interstate BancSystem's Annual General Meeting to take place on 20th of May
• Salary of US$971.4k is part of CEO Kevin Riley's total remuneration
• The total compensation is similar to the average for the industry
• First Interstate BancSystem's three-year loss to shareholders was 32% while its EPS was down 5.2% over the past three years

The results at First Interstate BancSystem, Inc. (NASDAQ:FIBK) have been quite disappointing recently and CEO Kevin Riley bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for First Interstate BancSystem

How Does Total Compensation For Kevin Riley Compare With Other Companies In The Industry?

At the time of writing, our data shows that First Interstate BancSystem, Inc. has a market capitalization of US$2.9b, and reported total annual CEO compensation of US$3.4m for the year to December 2023. Notably, that's a decrease of 27% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$971k.

On comparing similar companies from the American Banks industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$4.7m. So it looks like First Interstate BancSystem compensates Kevin Riley in line with the median for the industry. Moreover, Kevin Riley also holds US$4.7m worth of First Interstate BancSystem stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$971k	US$923k	29%
Other	US$2.4m	US$3.7m	71%
Total Compensation	US$3.4m	US$4.6m	100%

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. It's interesting to note that First Interstate BancSystem 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.

First Interstate BancSystem, Inc.'s Growth

Over the last three years, First Interstate BancSystem, Inc. has shrunk its earnings per share by 5.2% per year. Its revenue is down 9.7% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Interstate BancSystem, Inc. Been A Good Investment?

Few First Interstate BancSystem, Inc. shareholders would feel satisfied with the return of -32% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

So you may want to check if insiders are buying First Interstate BancSystem shares with their own money (free access).

Switching gears from First Interstate BancSystem, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.