It would be hard to discount the role that CEO Scott Everson has played in delivering the impressive results at United Bancorp, Inc. (NASDAQ:UBCP) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 21 April 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
Comparing United Bancorp, Inc.'s CEO Compensation With the industry
According to our data, United Bancorp, Inc. has a market capitalization of US$85m, and paid its CEO total annual compensation worth US$661k over the year to December 2020. Notably, that's an increase of 30% over the year before. Notably, the salary which is US$356.9k, represents a considerable chunk of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$565k. So it looks like United Bancorp compensates Scott Everson in line with the median for the industry. Furthermore, Scott Everson directly owns US$1.8m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. According to our research, United Bancorp has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at United Bancorp, Inc.'s Growth Numbers
Over the past three years, United Bancorp, Inc. has seen its earnings per share (EPS) grow by 26% per year. Its revenue is up 11% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent 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 United Bancorp, Inc. Been A Good Investment?
Boasting a total shareholder return of 34% over three years, United Bancorp, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for United Bancorp that investors should look into moving forward.
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 United Bancorp, 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.