David Turner has been the CEO of Hawthorn Bancshares, Inc. (NASDAQ:HWBK) since 2011. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Turner’s Compensation Compare With Similar Sized Companies?
According to our data, Hawthorn Bancshares, Inc. has a market capitalization of US$164m, and pays its CEO total annual compensation worth US$646k. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$476k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.
Most shareholders would consider it a positive that David Turner takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Hawthorn Bancshares has changed over time.
Is Hawthorn Bancshares, Inc. Growing?
On average over the last three years, Hawthorn Bancshares, Inc. has grown earnings per share (EPS) by 5.3% each year (using a line of best fit). In the last year, its revenue is up 6.3%.
I’d prefer higher revenue growth, but the modest improvement in EPS is good. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.
Has Hawthorn Bancshares, Inc. Been A Good Investment?
I think that the total shareholder return of 119%, over three years, would leave most Hawthorn Bancshares, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
It appears that Hawthorn Bancshares, Inc. remunerates its CEO below most similar sized companies.
It’s well worth noting that while David Turner is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. Although we could see higher growth, we’d argue the remuneration is modest, based on these observations. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hawthorn Bancshares.
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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