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In 2008 Mike Scudder was appointed CEO of First Midwest Bancorp, Inc. (NASDAQ:FMBI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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 Mike Scudder’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that First Midwest Bancorp, Inc. has a market cap of US$2.4b, and is paying total annual CEO compensation of US$3.4m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$846k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3.5m.
So Mike Scudder receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at First Midwest Bancorp has changed over time.
Is First Midwest Bancorp, Inc. Growing?
Over the last three years First Midwest Bancorp, Inc. has grown its earnings per share (EPS) by an average of 5.7% per year (using a line of best fit). Its revenue is up 1.6% over last year.
I’d prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. You might want to check this free visual report on analyst forecasts for future earnings.
Has First Midwest Bancorp, Inc. Been A Good Investment?
Most shareholders would probably be pleased with First Midwest Bancorp, Inc. for providing a total return of 43% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Mike Scudder is paid around the same as most CEOs of similar size companies.
While the growth could be better, the shareholder returns are clearly good. So we can conclude that on this analysis the CEO compensation seems pretty sound. Shareholders may want to check for free if First Midwest Bancorp insiders are buying or selling shares.
Important note: First Midwest Bancorp 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.