Shareholders May Be Wary Of Increasing LCNB Corp.'s (NASDAQ:LCNB) CEO Compensation Package

Key Insights

• LCNB's Annual General Meeting to take place on 22nd of April
• Total pay for CEO Eric Meilstrup includes US$431.0k salary
• The total compensation is similar to the average for the industry
• Over the past three years, LCNB's EPS fell by 15% and over the past three years, the total loss to shareholders 9.3%

LCNB Corp. (NASDAQ:LCNB) has not performed well recently and CEO Eric Meilstrup will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 22nd of April. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for LCNB

How Does Total Compensation For Eric Meilstrup Compare With Other Companies In The Industry?

According to our data, LCNB Corp. has a market capitalization of US$186m, and paid its CEO total annual compensation worth US$833k over the year to December 2023. That's a notable increase of 41% on last year. We note that the salary of US$431.0k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the American Banks industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.1m. This suggests that LCNB remunerates its CEO largely in line with the industry average. What's more, Eric Meilstrup holds US$542k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$431k	US$395k	52%
Other	US$402k	US$194k	48%
Total Compensation	US$833k	US$589k	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. According to our research, LCNB has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

LCNB Corp.'s Growth

Over the last three years, LCNB Corp. has shrunk its earnings per share by 15% per year. It saw its revenue drop 7.2% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has LCNB Corp. Been A Good Investment?

Since shareholders would have lost about 9.3% over three years, some LCNB Corp. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 3 warning signs for LCNB that investors should be aware of in a dynamic business environment.

Switching gears from LCNB, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.