Is Mackinac Financial Corporation’s (NASDAQ:MFNC) CEO Pay Justified?

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Paul Tobias has been the CEO of Mackinac Financial Corporation (NASDAQ:MFNC) since 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Mackinac Financial

How Does Paul Tobias’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Mackinac Financial Corporation has a market cap of US$166m, and is paying total annual CEO compensation of US$573k. (This number is for the twelve months until December 2018). We note that’s an increase of 14% above last year. While we always look at total compensation first, we note that the salary component is less, at US$370k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.2m.

A first glance this seems like a real positive for shareholders, since Paul Tobias is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.

You can see, below, how CEO compensation at Mackinac Financial has changed over time.

NasdaqCM:MFNC CEO Compensation, June 11th 2019
NasdaqCM:MFNC CEO Compensation, June 11th 2019

Is Mackinac Financial Corporation Growing?

Mackinac Financial Corporation has increased its earnings per share (EPS) by an average of 4.9% a year, over the last three years (using a line of best fit). Its revenue is up 33% over last year.

It’s great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. I’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. It could be important to check this free visual depiction of what analysts expect for the future.

Has Mackinac Financial Corporation Been A Good Investment?

Most shareholders would probably be pleased with Mackinac Financial Corporation for providing a total return of 54% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

It looks like Mackinac Financial Corporation pays its CEO less than similar sized companies.

Paul Tobias is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. Although we could see higher growth, we’d argue the remuneration is modest, based on these observations. So you may want to check if insiders are buying Mackinac Financial shares with their own money (free access).

If you want to buy a stock that is better than Mackinac Financial, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.