We Think Old National Bancorp's (NASDAQ:ONB) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Old National Bancorp will host its Annual General Meeting on 15th of May
• CEO Jim Ryan's total compensation includes salary of US$1.14m
• Total compensation is similar to the industry average
• Over the past three years, Old National Bancorp's EPS fell by 1.4% and over the past three years, the total loss to shareholders 1.5%

Shareholders will probably not be too impressed with the underwhelming results at Old National Bancorp (NASDAQ:ONB) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 15th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Old National Bancorp

Comparing Old National Bancorp's CEO Compensation With The Industry

According to our data, Old National Bancorp has a market capitalization of US$5.5b, and paid its CEO total annual compensation worth US$6.5m over the year to December 2023. That's a notable decrease of 44% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

For comparison, other companies in the American Banks industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$5.7m. This suggests that Old National Bancorp remunerates its CEO largely in line with the industry average. Furthermore, Jim Ryan directly owns US$12m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$1.1m	18%
Other	US$5.4m	US$11m	82%
Total Compensation	US$6.5m	US$12m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. In Old National Bancorp's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Old National Bancorp's Growth Numbers

Old National Bancorp has reduced its earnings per share by 1.4% a year over the last three years. In the last year, its revenue is down 5.0%.

The lack of EPS growth is certainly uninspiring. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Old National Bancorp Been A Good Investment?

Since shareholders would have lost about 1.5% over three years, some Old National Bancorp investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Old National Bancorp that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.