Is MainStreet Bancshares, Inc. (NASDAQ:MNSB) Excessively Paying Its CEO?

Jeff Dick became the CEO of MainStreet Bancshares, Inc. (NASDAQ:MNSB) in 2016. 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for MainStreet Bancshares

How Does Jeff Dick’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that MainStreet Bancshares, Inc. has a market cap of US$176m, and reported total annual CEO compensation of US$660k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$440k. 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.

Most shareholders would consider it a positive that Jeff Dick 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. It could be important to check this free visual depiction of what analysts expect for the future.

You can see a visual representation of the CEO compensation at MainStreet Bancshares, below.

NasdaqCM:MNSB CEO Compensation, November 13th 2019
NasdaqCM:MNSB CEO Compensation, November 13th 2019

Is MainStreet Bancshares, Inc. Growing?

On average over the last three years, MainStreet Bancshares, Inc. has grown earnings per share (EPS) by 26% each year (using a line of best fit). It achieved revenue growth of 52% over the last year.

This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

Has MainStreet Bancshares, Inc. Been A Good Investment?

Boasting a total shareholder return of 78% over three years, MainStreet Bancshares, Inc. has done well by shareholders. 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.

In Summary…

It appears that MainStreet Bancshares, Inc. remunerates its CEO below most similar sized companies.

Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Jeff Dick deserves a raise! It’s not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling MainStreet Bancshares (free visualization of insider trades).

If you want to buy a stock that is better than MainStreet Bancshares, 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.