Why We Think Richmond Mutual Bancorporation, Inc.'s (NASDAQ:RMBI) CEO Compensation Is Not Excessive At All

Key Insights

• Richmond Mutual Bancorporation will host its Annual General Meeting on 21st of May
• Total pay for CEO Garry Kleer includes US$490.4k salary
• The overall pay is comparable to the industry average
• Richmond Mutual Bancorporation's total shareholder return over the past three years was 5.7% while its EPS was down 3.4% over the past three years

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Despite Richmond Mutual Bancorporation, Inc.'s (NASDAQ:RMBI) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 21st of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Richmond Mutual Bancorporation

How Does Total Compensation For Garry Kleer Compare With Other Companies In The Industry?

According to our data, Richmond Mutual Bancorporation, Inc. has a market capitalization of US$136m, and paid its CEO total annual compensation worth US$728k over the year to December 2024. That's slightly lower by 5.2% over the previous year. We note that the salary portion, which stands at US$490.4k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the American Banks industry with market capitalizations under US$200m, the reported median total CEO compensation was US$623k. This suggests that Richmond Mutual Bancorporation remunerates its CEO largely in line with the industry average. What's more, Garry Kleer holds US$1.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$490k	US$479k	67%
Other	US$238k	US$289k	33%
Total Compensation	US$728k	US$769k	100%

On an industry level, roughly 44% of total compensation represents salary and 56% is other remuneration. It's interesting to note that Richmond Mutual Bancorporation pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Richmond Mutual Bancorporation, Inc.'s Growth Numbers

Over the last three years, Richmond Mutual Bancorporation, Inc. has shrunk its earnings per share by 3.4% per year. In the last year, its revenue is up 2.6%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Richmond Mutual Bancorporation, Inc. Been A Good Investment?

Richmond Mutual Bancorporation, Inc. has generated a total shareholder return of 5.7% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

Whatever your view on compensation, you might want to check if insiders are buying or selling Richmond Mutual Bancorporation shares (free trial).

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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.