Stock Analysis

Shareholders Will Probably Hold Off On Increasing SmartFinancial, Inc.'s (NASDAQ:SMBK) CEO Compensation For The Time Being

  •  Updated
Source: Shutterstock

In the past three years, the share price of SmartFinancial, Inc. (NASDAQ:SMBK) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 27 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for SmartFinancial

How Does Total Compensation For Billy Carroll Compare With Other Companies In The Industry?

At the time of writing, our data shows that SmartFinancial, Inc. has a market capitalization of US$353m, and reported total annual CEO compensation of US$809k for the year to December 2020. That's a modest increase of 3.2% on the prior year. We note that the salary of US$475.5k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.1m. This suggests that SmartFinancial remunerates its CEO largely in line with the industry average. What's more, Billy Carroll holds US$3.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$476k US$457k 59%
Other US$334k US$327k 41%
Total CompensationUS$809k US$784k100%

On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. SmartFinancial pays out 59% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

NasdaqCM:SMBK CEO Compensation May 20th 2021

A Look at SmartFinancial, Inc.'s Growth Numbers

Over the past three years, SmartFinancial, Inc. has seen its earnings per share (EPS) grow by 43% per year. In the last year, its revenue is up 31%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has SmartFinancial, Inc. Been A Good Investment?

Since shareholders would have lost about 4.5% over three years, some SmartFinancial, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Shareholders may want to check for free if SmartFinancial insiders are buying or selling shares.

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

If you decide to trade SmartFinancial, 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

Valuation is complex, but we're helping make it simple.

Find out whether SmartFinancial is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis