A Quick Analysis On OptimumBank Holdings' (NASDAQ:OPHC) CEO Compensation

This article will reflect on the compensation paid to Tim Terry who has served as CEO of OptimumBank Holdings, Inc. (NASDAQ:OPHC) since 2016. This analysis will also assess whether OptimumBank Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for OptimumBank Holdings

How Does Total Compensation For Tim Terry Compare With Other Companies In The Industry?

Our data indicates that OptimumBank Holdings, Inc. has a market capitalization of US$9.7m, and total annual CEO compensation was reported as US$233k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of US$225.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$609k. This suggests that Tim Terry is paid below the industry median.

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. OptimumBank Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at OptimumBank Holdings, Inc.'s Growth Numbers

Over the last three years, OptimumBank Holdings, Inc. has shrunk its earnings per share by 34% per year. It achieved revenue growth of 28% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has OptimumBank Holdings, Inc. Been A Good Investment?

Since shareholders would have lost about 30% over three years, some OptimumBank Holdings, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

OptimumBank Holdings pays its CEO a majority of compensation through a salary. As we touched on above, OptimumBank Holdings, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But poor shareholder returns EPS growth have hampered the company over the past three years. On the flip side, recent revenue growth has been positive. So, although Tim is modestly paid, shareholders might want to see positive shareholder returns before warming to the idea of a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 6 warning signs for OptimumBank Holdings (of which 3 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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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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. 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.
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