It May Be Possible That Macatawa Bank Corporation's (NASDAQ:MCBC) CEO Compensation Could Get Bumped Up

The decent performance at Macatawa Bank Corporation (NASDAQ:MCBC) recently will please most shareholders as they go into the AGM coming up on 04 May 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Macatawa Bank

Comparing Macatawa Bank Corporation's CEO Compensation With the industry

Our data indicates that Macatawa Bank Corporation has a market capitalization of US$334m, and total annual CEO compensation was reported as US$610k for the year to December 2020. That's a modest increase of 4.5% on the prior year. Notably, the salary which is US$491.3k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.1m. This suggests that Ron Haan is paid below the industry median. What's more, Ron Haan holds US$2.9m 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$491k	US$465k	81%
Other	US$118k	US$119k	19%
Total Compensation	US$610k	US$584k	100%

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. According to our research, Macatawa Bank has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Macatawa Bank Corporation's Growth

Macatawa Bank Corporation's earnings per share (EPS) grew 21% per year over the last three years. Its revenue is up 1.6% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Macatawa Bank Corporation Been A Good Investment?

Macatawa Bank Corporation has not done too badly by shareholders, with a total return of 0.3%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Macatawa Bank (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Macatawa 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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