OptimumBank Holdings, Inc.'s (NASDAQ:OPHC) CEO Compensation Looks Acceptable To Us And Here's Why

Shareholders may be wondering what CEO Tim Terry plans to do to improve the less than great performance at OptimumBank Holdings, Inc. (NASDAQ:OPHC) recently. At the next AGM coming up on 25 May 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for OptimumBank Holdings

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

According to our data, OptimumBank Holdings, Inc. has a market capitalization of US$11m, and paid its CEO total annual compensation worth US$269k over the year to December 2020. We note that's an increase of 15% above last year. We note that the salary portion, which stands at US$250.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$577k. That is to say, Tim Terry is paid under the industry median.

Component	2020	2019	Proportion (2020)
Salary	US$250k	US$225k	93%
Other	US$19k	US$8.4k	7%
Total Compensation	US$269k	US$233k	100%

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. OptimumBank Holdings pays out 93% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

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

Over the last three years, OptimumBank Holdings, Inc. has shrunk its earnings per share by 57% per year. It achieved revenue growth of 51% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has OptimumBank Holdings, Inc. Been A Good Investment?

The return of -34% over three years would not have pleased OptimumBank Holdings, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning. The poor performance of the share price might have something to do with the lack of earnings growth. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is a bit unpleasant) in OptimumBank Holdings we think you should know about.

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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