Here's Why Shareholders May Consider Paying Republic Bancorp, Inc.'s (NASDAQ:RBCA.A) CEO A Little More

Shareholders will probably not be disappointed by the robust results at Republic Bancorp, Inc. (NASDAQ:RBCA.A) recently and they will be keeping this in mind as they go into the AGM on 22 April 2021. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Republic Bancorp

Comparing Republic Bancorp, Inc.'s CEO Compensation With the industry

According to our data, Republic Bancorp, Inc. has a market capitalization of US$956m, and paid its CEO total annual compensation worth US$640k over the year to December 2020. That's a notable increase of 8.1% on last year. Notably, the salary which is US$425.0k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$1.5m. In other words, Republic Bancorp pays its CEO lower than the industry median. Moreover, Steve Trager also holds US$5.4m worth of Republic Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$425k	US$394k	66%
Other	US$215k	US$198k	34%
Total Compensation	US$640k	US$592k	100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. According to our research, Republic Bancorp has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Republic Bancorp, Inc.'s Growth

Republic Bancorp, Inc. has seen its earnings per share (EPS) increase by 22% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Republic Bancorp, Inc. Been A Good Investment?

Republic Bancorp, Inc. has served shareholders reasonably well, with a total return of 20% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Republic Bancorp that investors should be aware of in a dynamic business environment.

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.

If you decide to trade Republic Bancorp, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.