Here's Why Hawthorn Bancshares, Inc.'s (NASDAQ:HWBK) CEO Compensation Is The Least Of Shareholders' Concerns

CEO David Turner has done a decent job of delivering relatively good performance at Hawthorn Bancshares, Inc. (NASDAQ:HWBK) recently. As shareholders go into the upcoming AGM on 08 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

View our latest analysis for Hawthorn Bancshares

Comparing Hawthorn Bancshares, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Hawthorn Bancshares, Inc. has a market capitalization of US$153m, and reported total annual CEO compensation of US$711k for the year to December 2020. That is, the compensation was roughly the same as last year. Notably, the salary which is US$495.1k, represents most of the total compensation being paid.

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$763k. So it looks like Hawthorn Bancshares compensates David Turner in line with the median for the industry. What's more, David Turner holds US$2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$495k	US$476k	70%
Other	US$216k	US$221k	30%
Total Compensation	US$711k	US$697k	100%

Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. Hawthorn Bancshares is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Hawthorn Bancshares, Inc.'s Growth

Hawthorn Bancshares, Inc.'s earnings per share (EPS) grew 79% per year over the last three years. It achieved revenue growth of 27% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Hawthorn Bancshares, Inc. Been A Good Investment?

Hawthorn Bancshares, Inc. has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. 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...

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, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

So you may want to check if insiders are buying Hawthorn Bancshares shares with their own money (free access).

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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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