Shareholders Will Probably Hold Off On Increasing Alerus Financial Corporation's (NASDAQ:ALRS) CEO Compensation For The Time Being
Key Insights
- Alerus Financial will host its Annual General Meeting on 8th of May
- CEO Katie Lorenson's total compensation includes salary of US$600.0k
- The total compensation is similar to the average for the industry
- Alerus Financial's three-year loss to shareholders was 13% while its EPS was down 29% over the past three years
In the past three years, the share price of Alerus Financial Corporation (NASDAQ:ALRS) has struggled to generate growth for its shareholders. Per share earnings growth is also poor, despite revenues growing. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 8th of May, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's why we think shareholders should hold off on a raise for the CEO at the moment.
Check out our latest analysis for Alerus Financial
Comparing Alerus Financial Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that Alerus Financial Corporation has a market capitalization of US$503m, and reported total annual CEO compensation of US$1.3m for the year to December 2024. That's a notable increase of 23% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$600k.
In comparison with other companies in the American Diversified Financial industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.3m. From this we gather that Katie Lorenson is paid around the median for CEOs in the industry. What's more, Katie Lorenson holds US$1.0m worth of shares in the company in their own name.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$600k | US$550k | 45% |
| Other | US$740k | US$543k | 55% |
| Total Compensation | US$1.3m | US$1.1m | 100% |
Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. Alerus Financial is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Alerus Financial Corporation's Growth Numbers
Over the last three years, Alerus Financial Corporation has shrunk its earnings per share by 29% per year. Its revenue is up 36% over the last year.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Alerus Financial Corporation Been A Good Investment?
Given the total shareholder loss of 13% over three years, many shareholders in Alerus Financial Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In 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 is in line with their expectations.
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. That's why we did some digging and identified 2 warning signs for Alerus Financial that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
Valuation is complex, but we're here to simplify it.
Discover if Alerus Financial might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.