Increases to Bank of Hawaii Corporation's (NYSE:BOH) CEO Compensation Might Cool off for now

Key Insights

• Bank of Hawaii's Annual General Meeting to take place on 26th of April
• Total pay for CEO Peter Ho includes US$878.3k salary
• The total compensation is 55% higher than the average for the industry
• Bank of Hawaii's EPS grew by 2.0% over the past three years while total shareholder loss over the past three years was 27%

In the past three years, the share price of Bank of Hawaii Corporation (NYSE:BOH) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Bank of Hawaii

Comparing Bank of Hawaii Corporation's CEO Compensation With The Industry

Our data indicates that Bank of Hawaii Corporation has a market capitalization of US$2.3b, and total annual CEO compensation was reported as US$4.6m for the year to December 2023. We note that's a decrease of 24% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$878k.

On comparing similar companies from the American Banks industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$3.0m. This suggests that Peter Ho is paid more than the median for the industry. Furthermore, Peter Ho directly owns US$11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$878k	US$860k	19%
Other	US$3.7m	US$5.2m	81%
Total Compensation	US$4.6m	US$6.1m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. In Bank of Hawaii's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Bank of Hawaii Corporation's Growth Numbers

Bank of Hawaii Corporation's earnings per share (EPS) grew 2.0% per year over the last three years. Its revenue is down 5.6% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Bank of Hawaii Corporation Been A Good Investment?

Since shareholders would have lost about 27% over three years, some Bank of Hawaii Corporation investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Bank of Hawaii that investors should be aware of in a dynamic business environment.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.