Stock Analysis

It's Probably Less Likely That First United Corporation's (NASDAQ:FUNC) CEO Will See A Huge Pay Rise This Year

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In the past three years, shareholders of First United Corporation (NASDAQ:FUNC) have seen a loss on their investment. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for First United

Comparing First United Corporation's CEO Compensation With the industry

According to our data, First United Corporation has a market capitalization of US$119m, and paid its CEO total annual compensation worth US$539k over the year to December 2020. Notably, that's an increase of 35% over the year before. Notably, the salary which is US$394.7k, 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$572k. From this we gather that Carissa Rodeheaver is paid around the median for CEOs in the industry. Furthermore, Carissa Rodeheaver directly owns US$375k worth of shares in the company.

Component20202019Proportion (2020)
Salary US$395k US$389k 73%
Other US$144k US$11k 27%
Total CompensationUS$539k US$400k100%

Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. First United pays out 73% of remuneration in the form of a salary, significantly higher than the industry average. 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.

NasdaqGS:FUNC CEO Compensation May 14th 2021

First United Corporation's Growth

Over the past three years, First United Corporation has seen its earnings per share (EPS) grow by 45% per year. It achieved revenue growth of 10% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has First United Corporation Been A Good Investment?

With a three year total loss of 4.5% for the shareholders, First United Corporation would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for First United that you should be aware of before investing.

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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