How Should Investors Feel About First US Bancshares' (NASDAQ:FUSB) CEO Remuneration?

Jim House has been the CEO of First US Bancshares, Inc. (NASDAQ:FUSB) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for First US Bancshares.

Check out our latest analysis for First US Bancshares

Comparing First US Bancshares, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that First US Bancshares, Inc. has a market capitalization of US$53m, and reported total annual CEO compensation of US$542k for the year to December 2019. We note that's a decrease of 13% compared to last year. We note that the salary portion, which stands at US$345.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$626k. This suggests that First US Bancshares remunerates its CEO largely in line with the industry average. What's more, Jim House holds US$457k worth of shares in the company in their own name.

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. First US Bancshares is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.

A Look at First US Bancshares, Inc.'s Growth Numbers

First US Bancshares, Inc. has seen its earnings per share (EPS) increase by 28% a year over the past three years. In the last year, its revenue is down 5.8%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has First US Bancshares, Inc. Been A Good Investment?

Since shareholders would have lost about 37% over three years, some First US Bancshares, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we touched on above, First US Bancshares, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, the company has logged negative shareholder returns over the previous three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for First US Bancshares that investors should think about before committing capital to this stock.

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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This article by Simply Wall St is general in nature. 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.
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