Shareholders May Not Be So Generous With SB Financial Group, Inc.'s (NASDAQ:SBFG) CEO Compensation And Here's Why

Under the guidance of CEO Mark Klein, SB Financial Group, Inc. (NASDAQ:SBFG) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21 April 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for SB Financial Group

How Does Total Compensation For Mark Klein Compare With Other Companies In The Industry?

At the time of writing, our data shows that SB Financial Group, Inc. has a market capitalization of US$128m, and reported total annual CEO compensation of US$808k for the year to December 2020. We note that's an increase of 12% above last year. In particular, the salary of US$411.6k, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$565k. Accordingly, our analysis reveals that SB Financial Group, Inc. pays Mark Klein north of the industry median. Moreover, Mark Klein also holds US$1.5m 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	2020	2019	Proportion (2020)
Salary	US$412k	US$383k	51%
Other	US$396k	US$336k	49%
Total Compensation	US$808k	US$719k	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. SB Financial Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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

SB Financial Group, Inc. has reduced its earnings per share by 2.1% a year over the last three years. It achieved revenue growth of 23% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. 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?

With a total shareholder return of 0.3% over three years, SB Financial Group, Inc. has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for SB Financial Group you should be aware of, and 1 of them is a bit unpleasant.

Important note: SB Financial Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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