Yahoo Finance Here's Why Shareholders May Want To Be Cautious With Increasing First Hawaiian, Inc.'s (NASDAQ:FHB) CEO Pay Packet
Key Insights
First Hawaiian's Annual General Meeting to take place on 24th of April
Total pay for CEO Bob Harrison includes US$1.03m salary
The total compensation is similar to the average for the industry
First Hawaiian's EPS grew by 8.8% over the past three years while total shareholder loss over the past three years was 14%
In the past three years, the share price of First Hawaiian, Inc. (NASDAQ:FHB) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 24th of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
See our latest analysis for First Hawaiian
Comparing First Hawaiian, Inc.'s CEO Compensation With The Industry
Our data indicates that First Hawaiian, Inc. has a market capitalization of US$2.6b, and total annual CEO compensation was reported as US$5.4m for the year to December 2023. That's a notable increase of 18% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the American Banks industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$4.7m. From this we gather that Bob Harrison is paid around the median for CEOs in the industry. Moreover, Bob Harrison also holds US$7.0m worth of First Hawaiian 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$1.0m | US$1.0m | 19% |
Other | US$4.3m | US$3.5m | 81% |
Total Compensation | US$5.4m | US$4.6m | 100% |
On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. First Hawaiian sets aside a smaller share of compensation for 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 First Hawaiian, Inc.'s Growth Numbers
First Hawaiian, Inc. has seen its earnings per share (EPS) increase by 8.8% a year over the past three years. Its revenue is up 2.4% over the last year.
We'd prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has First Hawaiian, Inc. Been A Good Investment?
Given the total shareholder loss of 14% over three years, many shareholders in First Hawaiian, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for First Hawaiian you should be aware of, and 1 of them is potentially serious.
Switching gears from First Hawaiian, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Have 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.
