Shareholders Will Likely Find Home Bancorp, Inc.'s (NASDAQ:HBCP) CEO Compensation Acceptable

The performance at Home Bancorp, Inc. (NASDAQ:HBCP) has been rather lacklustre of late and shareholders may be wondering what CEO John Bordelon is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 05 May 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Home Bancorp

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

At the time of writing, our data shows that Home Bancorp, Inc. has a market capitalization of US$325m, and reported total annual CEO compensation of US$890k for the year to December 2020. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$401k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.5m. In other words, Home Bancorp pays its CEO lower than the industry median. Moreover, John Bordelon also holds US$6.4m worth of Home Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$401k	US$391k	45%
Other	US$490k	US$502k	55%
Total Compensation	US$890k	US$894k	100%

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. In Home Bancorp's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Home Bancorp, Inc.'s Growth Numbers

Over the past three years, Home Bancorp, Inc. has seen its earnings per share (EPS) grow by 17% per year. Its revenue is up 18% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Home Bancorp, Inc. Been A Good Investment?

Since shareholders would have lost about 7.3% over three years, some Home Bancorp, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The uninspiring share price returns contrasts with the strong EPS growth, suggesting that there may be other factors at play causing it to diverge from fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Home Bancorp (1 is concerning!) that you should be aware of before investing here.

Switching gears from Home Bancorp, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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