Shareholders May Be A Bit More Conservative With Midland States Bancorp, Inc.'s (NASDAQ:MSBI) CEO Compensation For Now

Key Insights

• Midland States Bancorp's Annual General Meeting to take place on 6th of May
• Total pay for CEO Jeff Ludwig includes US$721.0k salary
• Total compensation is similar to the industry average
• Midland States Bancorp's three-year loss to shareholders was 12% while its EPS grew by 16% over the past three years

As many shareholders of Midland States Bancorp, Inc. (NASDAQ:MSBI) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 6th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Midland States Bancorp

Comparing Midland States Bancorp, Inc.'s CEO Compensation With The Industry

Our data indicates that Midland States Bancorp, Inc. has a market capitalization of US$471m, and total annual CEO compensation was reported as US$1.6m for the year to December 2023. That's a notable decrease of 8.1% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$721k.

In comparison with other companies in the American Banks industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.5m. From this we gather that Jeff Ludwig is paid around the median for CEOs in the industry. Furthermore, Jeff Ludwig directly owns US$7.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$721k	US$700k	44%
Other	US$913k	US$1.1m	56%
Total Compensation	US$1.6m	US$1.8m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. There isn't a significant difference between Midland States Bancorp and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Midland States Bancorp, Inc.'s Growth

Midland States Bancorp, Inc.'s earnings per share (EPS) grew 16% per year over the last three years. It saw its revenue drop 12% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Midland States Bancorp, Inc. Been A Good Investment?

Given the total shareholder loss of 12% over three years, many shareholders in Midland States Bancorp, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Midland States Bancorp that you should be aware of before investing.

Important note: Midland States Bancorp 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. 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.