Most Shareholders Will Probably Find That The CEO Compensation For German American Bancorp, Inc. (NASDAQ:GABC) Is Reasonable

Under the guidance of CEO Mark Schroeder, German American Bancorp, Inc. (NASDAQ:GABC) has performed reasonably well recently. As shareholders go into the upcoming AGM on 20 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for German American Bancorp

Comparing German American Bancorp, Inc.'s CEO Compensation With the industry

According to our data, German American Bancorp, Inc. has a market capitalization of US$1.1b, and paid its CEO total annual compensation worth US$1.4m over the year to December 2020. That's a notable increase of 34% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$600k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$1.5m. This suggests that German American Bancorp remunerates its CEO largely in line with the industry average. What's more, Mark Schroeder holds US$7.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$600k	US$430k	44%
Other	US$771k	US$594k	56%
Total Compensation	US$1.4m	US$1.0m	100%

On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. There isn't a significant difference between German American Bancorp and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

German American Bancorp, Inc.'s Growth

German American Bancorp, Inc. has seen its earnings per share (EPS) increase by 12% a year over the past three years. Its revenue is up 9.5% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has German American Bancorp, Inc. Been A Good Investment?

German American Bancorp, Inc. has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for German American Bancorp you should be aware of, and 1 of them shouldn't be ignored.

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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