Our Take On Hingham Institution for Savings' (NASDAQ:HIFS) CEO Salary

This article will reflect on the compensation paid to Robert Gaughen who has served as CEO of Hingham Institution for Savings (NASDAQ:HIFS) since 1993. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Hingham Institution for Savings

Comparing Hingham Institution for Savings' CEO Compensation With the industry

At the time of writing, our data shows that Hingham Institution for Savings has a market capitalization of US$462m, and reported total annual CEO compensation of US$2.0m for the year to December 2019. That's a modest increase of 3.9% on the prior year. We note that the salary portion, which stands at US$1.94m constitutes the majority of total compensation received by the CEO.

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$1.2m. Accordingly, our analysis reveals that Hingham Institution for Savings pays Robert Gaughen north of the industry median. What's more, Robert Gaughen holds US$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. Hingham Institution for Savings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Hingham Institution for Savings' Growth Numbers

Over the past three years, Hingham Institution for Savings has seen its earnings per share (EPS) grow by 21% per year. Its revenue is up 28% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast 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 Hingham Institution for Savings Been A Good Investment?

Hingham Institution for Savings has not done too badly by shareholders, with a total return of 9.7%, over three years. 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...

Robert receives almost all of their compensation through a salary. As we touched on above, Hingham Institution for Savings is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed us with its EPS growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize CEO compensation, though we'd recommend further research on management.

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. We've identified 1 warning sign for Hingham Institution for Savings that investors should be aware of in a dynamic business environment.

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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