Stock Analysis

Shareholders Will Probably Not Have Any Issues With Northrim BanCorp, Inc.'s (NASDAQ:NRIM) CEO Compensation

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Under the guidance of CEO Joe Schierhorn, Northrim BanCorp, Inc. (NASDAQ:NRIM) has performed reasonably well recently. 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 27 May 2021. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Northrim BanCorp

Comparing Northrim BanCorp, Inc.'s CEO Compensation With the industry

Our data indicates that Northrim BanCorp, Inc. has a market capitalization of US$278m, and total annual CEO compensation was reported as US$942k for the year to December 2020. We note that's an increase of 16% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$435k.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$763k. This suggests that Northrim BanCorp remunerates its CEO largely in line with the industry average. Moreover, Joe Schierhorn also holds US$2.0m worth of Northrim BanCorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$435k US$411k 46%
Other US$508k US$400k 54%
Total CompensationUS$942k US$811k100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. Although there is a difference in how total compensation is set, Northrim BanCorp more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NasdaqGS:NRIM CEO Compensation May 22nd 2021

Northrim BanCorp, Inc.'s Growth

Northrim BanCorp, Inc. has seen its earnings per share (EPS) increase by 53% a year over the past three years. In the last year, its revenue is up 48%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Northrim BanCorp, Inc. Been A Good Investment?

Northrim BanCorp, Inc. has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

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 Northrim BanCorp that you should be aware of before investing.

Important note: Northrim 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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