Why We Think TriCo Bancshares' (NASDAQ:TCBK) CEO Compensation Is Not Excessive At All

By
Simply Wall St
Published
May 21, 2021
NasdaqGS:TCBK

Under the guidance of CEO Rick Smith, TriCo Bancshares (NASDAQ:TCBK) has performed reasonably well recently. As shareholders go into the upcoming AGM on 27 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for TriCo Bancshares

Comparing TriCo Bancshares' CEO Compensation With the industry

Our data indicates that TriCo Bancshares has a market capitalization of US$1.4b, and total annual CEO compensation was reported as US$2.8m for the year to December 2020. We note that's a decrease of 40% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$825k.

On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$2.4m. So it looks like TriCo Bancshares compensates Rick Smith in line with the median for the industry. Moreover, Rick Smith also holds US$11m worth of TriCo Bancshares stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$825k US$782k 29%
Other US$2.0m US$3.9m 71%
Total CompensationUS$2.8m US$4.7m100%

Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. TriCo Bancshares sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NasdaqGS:TCBK CEO Compensation May 22nd 2021

A Look at TriCo Bancshares' Growth Numbers

Over the past three years, TriCo Bancshares has seen its earnings per share (EPS) grow by 14% per year. It saw its revenue drop 3.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has TriCo Bancshares Been A Good Investment?

TriCo Bancshares has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

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. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for TriCo Bancshares that investors should be aware of in a dynamic business environment.

Switching gears from TriCo Bancshares, 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.

Promoted
If you decide to trade TriCo Bancshares, 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.


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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record.