Is First Commonwealth Financial Corporation's (NYSE:FCF) CEO Being Overpaid?

Mike Price has been the CEO of First Commonwealth Financial Corporation (NYSE:FCF) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for First Commonwealth Financial

How Does Mike Price's Compensation Compare With Similar Sized Companies?

Our data indicates that First Commonwealth Financial Corporation is worth US$1.2b, and total annual CEO compensation was reported as US$1.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$472k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.6m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at First Commonwealth Financial has changed from year to year.

Is First Commonwealth Financial Corporation Growing?

First Commonwealth Financial Corporation has increased its earnings per share (EPS) by an average of 20% a year, over the last three years (using a line of best fit). Its revenue is up 3.9% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has First Commonwealth Financial Corporation Been A Good Investment?

With a three year total loss of 4.5%, First Commonwealth Financial Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

It looks like First Commonwealth Financial Corporation pays its CEO less than similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we don't think, Mike Price is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling First Commonwealth Financial (free visualization of insider trades).

If you want to buy a stock that is better than First Commonwealth Financial, this free list of high return, low debt companies is a great place to look.

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