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In 2016 Jim Brush was appointed CEO of Summit State Bank (NASDAQ:SSBI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Jim Brush’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Summit State Bank has a market cap of US$72m, and is paying total annual CEO compensation of US$176k. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$115k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$299k.
A first glance this seems like a real positive for shareholders, since Jim Brush is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Summit State Bank has changed from year to year.
Is Summit State Bank Growing?
Summit State Bank has reduced its earnings per share by an average of 5.6% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 18% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Summit State Bank Been A Good Investment?
With a total shareholder return of 27% over three years, Summit State Bank shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
It looks like Summit State Bank pays its CEO less than similar sized companies.
Jim Brush is remunerated more modestly than is a normal at similar sized companies. But the business isn’t growing earnings per share, and the returns to shareholders haven’t been wonderful. There is room for improved company performance, but we don’t see the CEO pay as a big issue here. Shareholders may want to check for free if Summit State Bank insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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 email@example.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. On rare occasion, data errors may occur. Thank you for reading.