A Look At HMN Financial's (NASDAQ:HMNF) CEO Remuneration

Brad Krehbiel became the CEO of HMN Financial, Inc. (NASDAQ:HMNF) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for HMN Financial.

View our latest analysis for HMN Financial

Comparing HMN Financial, Inc.'s CEO Compensation With the industry

According to our data, HMN Financial, Inc. has a market capitalization of US$75m, and paid its CEO total annual compensation worth US$468k over the year to December 2019. That's a modest increase of 4.3% on the prior year. We note that the salary portion, which stands at US$332.8k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$511k. So it looks like HMN Financial compensates Brad Krehbiel in line with the median for the industry. Furthermore, Brad Krehbiel directly owns US$2.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. HMN Financial pays out 71% of remuneration in the form of a salary, significantly higher than the industry average. 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 HMN Financial, Inc.'s Growth Numbers

HMN Financial, Inc.'s earnings per share (EPS) grew 10% per year over the last three years. In the last year, its revenue is up 3.3%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has HMN Financial, Inc. Been A Good Investment?

Given the total shareholder loss of 16% over three years, many shareholders in HMN Financial, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, HMN Financial, 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. On the other hand, the company has logged negative shareholder returns over the previous three years. But on the bright side, EPS growth is positive over the same period. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

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 HMN Financial that investors should be aware of in a dynamic business environment.

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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