We Think Shareholders Are Less Likely To Approve A Large Pay Rise For FS Bancorp, Inc.'s (NASDAQ:FSBW) CEO For Now

By
Simply Wall St
Published
May 21, 2021
NasdaqCM:FSBW
Source: Shutterstock

CEO Joe Adams has done a decent job of delivering relatively good performance at FS Bancorp, Inc. (NASDAQ:FSBW) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27 May 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for FS Bancorp

How Does Total Compensation For Joe Adams Compare With Other Companies In The Industry?

Our data indicates that FS Bancorp, Inc. has a market capitalization of US$291m, and total annual CEO compensation was reported as US$1.8m for the year to December 2020. That's a notable increase of 40% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$475k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$811k. Hence, we can conclude that Joe Adams is remunerated higher than the industry median. Moreover, Joe Adams also holds US$1.4m worth of FS Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$475k US$475k 26%
Other US$1.3m US$815k 74%
Total CompensationUS$1.8m US$1.3m100%

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. In FS Bancorp's case, non-salary compensation represents a greater slice of total remuneration, 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.

ceo-compensation
NasdaqCM:FSBW CEO Compensation May 21st 2021

FS Bancorp, Inc.'s Growth

FS Bancorp, Inc. has seen its earnings per share (EPS) increase by 31% a year over the past three years. It achieved revenue growth of 37% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 FS Bancorp, Inc. Been A Good Investment?

FS Bancorp, Inc. has served shareholders reasonably well, with a total return of 25% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for FS Bancorp you should be aware of, and 1 of them makes us a bit uncomfortable.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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