Why We Think Northfield Bancorp, Inc. (Staten Island, NY)'s (NASDAQ:NFBK) CEO Compensation Is Not Excessive At All

By
Simply Wall St
Published
May 19, 2021
NasdaqGS:NFBK
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Performance at Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK) has been reasonably good and CEO Steve Klein has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26 May 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Northfield Bancorp (Staten Island NY)

How Does Total Compensation For Steve Klein Compare With Other Companies In The Industry?

At the time of writing, our data shows that Northfield Bancorp, Inc. (Staten Island, NY) has a market capitalization of US$877m, and reported total annual CEO compensation of US$1.3m for the year to December 2020. That's a notable increase of 32% on last year. Notably, the salary which is US$650.0k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$1.5m. From this we gather that Steve Klein is paid around the median for CEOs in the industry. Moreover, Steve Klein also holds US$8.4m worth of Northfield Bancorp (Staten Island NY) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$650k US$595k 50%
Other US$641k US$382k 50%
Total CompensationUS$1.3m US$977k100%

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. Northfield Bancorp (Staten Island NY) is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
NasdaqGS:NFBK CEO Compensation May 20th 2021

Northfield Bancorp, Inc. (Staten Island, NY)'s Growth

Northfield Bancorp, Inc. (Staten Island, NY) has seen its earnings per share (EPS) increase by 23% a year over the past three years. Its revenue is up 33% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Northfield Bancorp, Inc. (Staten Island, NY) Been A Good Investment?

Northfield Bancorp, Inc. (Staten Island, NY) has served shareholders reasonably well, with a total return of 15% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Northfield Bancorp (Staten Island NY) you should be aware of, and 1 of them is concerning.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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