Is Sound Financial Bancorp, Inc.’s (NASDAQ:SFBC) CEO Pay Fair?

Laurie Stewart became the CEO of Sound Financial Bancorp, Inc. (NASDAQ:SFBC) in 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

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Check out our latest analysis for Sound Financial Bancorp

How Does Laurie Stewart’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Sound Financial Bancorp, Inc. has a market cap of US$86m, and is paying total annual CEO compensation of US$666k. (This is based on the year to December 2018). That’s a notable increase of 9.3% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$395k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$450k.

As you can see, Laurie Stewart is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Sound Financial Bancorp, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Sound Financial Bancorp, below.

NasdaqCM:SFBC CEO Compensation, May 21st 2019
NasdaqCM:SFBC CEO Compensation, May 21st 2019

Is Sound Financial Bancorp, Inc. Growing?

Over the last three years Sound Financial Bancorp, Inc. has grown its earnings per share (EPS) by an average of 12% per year (using a line of best fit). It achieved revenue growth of 15% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Sound Financial Bancorp, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Sound Financial Bancorp, Inc. for providing a total return of 52% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

We compared total CEO remuneration at Sound Financial Bancorp, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sound Financial Bancorp.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.