How Much Is Mercantile Bank's (NASDAQ:MBWM) CEO Getting Paid?

This article will reflect on the compensation paid to Bob Kaminski who has served as CEO of Mercantile Bank Corporation (NASDAQ:MBWM) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Mercantile Bank

How Does Total Compensation For Bob Kaminski Compare With Other Companies In The Industry?

Our data indicates that Mercantile Bank Corporation has a market capitalization of US$442m, and total annual CEO compensation was reported as US$1.0m for the year to December 2019. That's a modest increase of 6.6% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$499k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.1m. This suggests that Mercantile Bank remunerates its CEO largely in line with the industry average. Furthermore, Bob Kaminski 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 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Mercantile Bank is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Mercantile Bank Corporation's Growth Numbers

Over the past three years, Mercantile Bank Corporation has seen its earnings per share (EPS) grow by 12% per year. In the last year, its revenue is up 2.0%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Mercantile Bank Corporation Been A Good Investment?

Given the total shareholder loss of 12% over three years, many shareholders in Mercantile Bank Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Bob is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Mercantile Bank (1 doesn't sit too well with us!) that you should be aware of before investing here.

Important note: Mercantile Bank is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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