Some Shareholders May find It Hard To Increase Summit Financial Group, Inc.'s (NASDAQ:SMMF) CEO Compensation This Year

Performance at Summit Financial Group, Inc. (NASDAQ:SMMF) has been reasonably good and CEO Charlie Maddy has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 20 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Summit Financial Group

Comparing Summit Financial Group, Inc.'s CEO Compensation With the industry

According to our data, Summit Financial Group, Inc. has a market capitalization of US$303m, and paid its CEO total annual compensation worth US$947k over the year to December 2020. We note that's a decrease of 17% compared to last year. Notably, the salary which is US$507.5k, represents a considerable chunk of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.1m. From this we gather that Charlie Maddy is paid around the median for CEOs in the industry. What's more, Charlie Maddy holds US$2.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$508k	US$488k	54%
Other	US$439k	US$653k	46%
Total Compensation	US$947k	US$1.1m	100%

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. Summit Financial Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Summit Financial Group, Inc.'s Growth

Summit Financial Group, Inc.'s earnings per share (EPS) grew 19% per year over the last three years. It achieved revenue growth of 19% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Summit Financial Group, Inc. Been A Good Investment?

Summit Financial Group, Inc. has generated a total shareholder return of 1.2% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Summit Financial Group (1 is concerning!) that you should be aware of before investing here.

Important note: Summit 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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