It's Unlikely That The CEO Of National Bank Holdings Corporation (NYSE:NBHC) Will See A Huge Pay Rise This Year

Key Insights

• National Bank Holdings will host its Annual General Meeting on 1st of May
• Salary of US$850.0k is part of CEO Tim Laney's total remuneration
• The overall pay is comparable to the industry average
• National Bank Holdings' three-year loss to shareholders was 8.4% while its EPS grew by 9.4% over the past three years

In the past three years, the share price of National Bank Holdings Corporation (NYSE:NBHC) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 1st of May. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for National Bank Holdings

How Does Total Compensation For Tim Laney Compare With Other Companies In The Industry?

At the time of writing, our data shows that National Bank Holdings Corporation has a market capitalization of US$1.3b, and reported total annual CEO compensation of US$3.6m for the year to December 2023. That's a notable increase of 8.7% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$850k.

On examining similar-sized companies in the American Banks industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$3.0m. This suggests that National Bank Holdings remunerates its CEO largely in line with the industry average. Moreover, Tim Laney also holds US$9.4m worth of National Bank Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$850k	US$827k	24%
Other	US$2.7m	US$2.5m	76%
Total Compensation	US$3.6m	US$3.3m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. In National Bank Holdings' 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.

National Bank Holdings Corporation's Growth

National Bank Holdings Corporation's earnings per share (EPS) grew 9.4% per year over the last three years. It achieved revenue growth of 40% over the last year.

We like the look of the strong year-on-year improvement in revenue. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has National Bank Holdings Corporation Been A Good Investment?

With a three year total loss of 8.4% for the shareholders, National Bank Holdings Corporation would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for National Bank Holdings that investors should think about before committing capital to this stock.

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.