Mark Klein became the CEO of SB Financial Group, Inc. (NASDAQ:SBFG) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for SB Financial Group.
View our latest analysis for SB Financial Group
Comparing SB Financial Group, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that SB Financial Group, Inc. has a market capitalization of US$132m, and reported total annual CEO compensation of US$724k for the year to December 2019. That's a fairly small increase of 4.6% over the previous year. In particular, the salary of US$388.2k, makes up a huge portion of the total compensation being paid to 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$626k. From this we gather that Mark Klein is paid around the median for CEOs in the industry. Moreover, Mark Klein also holds US$1.4m worth of SB Financial Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$388k | US$362k | 54% |
| Other | US$336k | US$331k | 46% |
| Total Compensation | US$724k | US$692k | 100% |
On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. SB Financial Group pays out 54% 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 SB Financial Group, Inc.'s Growth Numbers
Over the last three years, SB Financial Group, Inc. has not seen its earnings per share change much, though they have deteriorated slightly. Its revenue is up 18% over the last year.
Investors would be a bit wary of companies that have lower EPS 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. 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 SB Financial Group, Inc. Been A Good Investment?
SB Financial Group, Inc. has generated a total shareholder return of 5.8% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As we touched on above, SB Financial Group, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But revenue growth over the last year can't be ignored. That's why we were hoping for more robust shareholder returns at this time. An additional worry is EPS , which has posted negative growth in the previous three years. There's certainly room for improvement, but CEO compensation seems reasonable, considering the company's steady performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for SB Financial Group (of which 1 shouldn'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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About NasdaqCM:SBFG
SB Financial Group
Operates as the financial holding company for the State Bank and Trust Company that provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan.
Flawless balance sheet, good value and pays a dividend.
