John Bordelon has been the CEO of Home Bancorp, Inc. (NASDAQ:HBCP) since 2008, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
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$237m, and reported total annual CEO compensation of US$894k for the year to December 2019. Notably, that's an increase of 11% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$391k.
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$894k. So it looks like Home Bancorp compensates John Bordelon in line with the median for the industry. Moreover, John Bordelon also holds US$4.5m worth of Home Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. 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
Home Bancorp, Inc. has reduced its earnings per share by 8.5% a year over the last three years. In the last year, its revenue is down 15%.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Home Bancorp, Inc. Been A Good Investment?
Since shareholders would have lost about 33% over three years, some Home Bancorp, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Home Bancorp, 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. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Home Bancorp that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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