What Can We Conclude About Summit Financial Group's (NASDAQ:SMMF) CEO Pay?

Charlie Maddy became the CEO of Summit Financial Group, Inc. (NASDAQ:SMMF) in 1994, 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 Summit Financial Group.

View our latest analysis for Summit Financial Group

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

Our data indicates that Summit Financial Group, Inc. has a market capitalization of US$284m, and total annual CEO compensation was reported as US$1.1m for the year to December 2019. Notably, that's a decrease of 13% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$488k.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$799k. Hence, we can conclude that Charlie Maddy is remunerated higher than the industry median. Furthermore, Charlie Maddy directly owns US$2.4m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. Summit Financial Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Summit Financial Group, Inc.'s Growth Numbers

Over the past three years, Summit Financial Group, Inc. has seen its earnings per share (EPS) grow by 22% per year. Its revenue is up 1.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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?

Given the total shareholder loss of 7.5% over three years, many shareholders in Summit Financial Group, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Summit Financial Group, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed with its EPS growth, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say Charlie is underpaid, in fact compensation is definitely on the higher side.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Summit Financial Group that investors should look into moving forward.

Switching gears from Summit Financial Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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