Shareholders May Not Be So Generous With Hingham Institution for Savings' (NASDAQ:HIFS) CEO Compensation And Here's Why

Under the guidance of CEO Robert Gaughen, Hingham Institution for Savings (NASDAQ:HIFS) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 29 April 2021. However, some shareholders will still be cautious of paying the CEO excessively.

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$638m, and reported total annual CEO compensation of US$2.1m for the year to December 2020. That's a fairly small increase of 5.3% over the previous year. In particular, the salary of US$2.04m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$1.5m. This suggests that Robert Gaughen is paid more than the median for the industry. Moreover, Robert Gaughen also holds US$14m worth of Hingham Institution for Savings 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$2.0m	US$1.9m	98%
Other	US$32k	US$32k	2%
Total Compensation	US$2.1m	US$2.0m	100%

On an industry level, around 51% of total compensation represents salary and 49% is other remuneration. Investors will find it interesting that Hingham Institution for Savings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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 Hingham Institution for Savings' Growth Numbers

Hingham Institution for Savings's earnings per share (EPS) grew 31% per year over the last three years. In the last year, its revenue is up 71%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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?

Most shareholders would probably be pleased with Hingham Institution for Savings for providing a total return of 49% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Hingham Institution for Savings pays its CEO a majority of compensation through a salary. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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. That's why we did some digging and identified 2 warning signs for Hingham Institution for Savings that investors should think about before committing capital to this stock.

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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