Yahoo Finance Shareholders May Be A Bit More Conservative With Capital Bancorp, Inc.'s (NASDAQ:CBNK) CEO Compensation For Now
Key Insights
Capital Bancorp to hold its Annual General Meeting on 16th of May
Salary of US$603.8k is part of CEO Ed Barry's total remuneration
Total compensation is similar to the industry average
Capital Bancorp's EPS grew by 0.6% over the past three years while total shareholder loss over the past three years was 1.1%
In the past three years, shareholders of Capital Bancorp, Inc. (NASDAQ:CBNK) have seen a loss on their investment. 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 16th 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.
Check out our latest analysis for Capital Bancorp
How Does Total Compensation For Ed Barry Compare With Other Companies In The Industry?
Our data indicates that Capital Bancorp, Inc. has a market capitalization of US$281m, and total annual CEO compensation was reported as US$1.1m for the year to December 2023. That is, the compensation was roughly the same as last year. We note that the salary of US$603.8k makes up a sizeable portion of the total compensation received by the CEO.
For comparison, other companies in the American Banks industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.1m. From this we gather that Ed Barry is paid around the median for CEOs in the industry. What's more, Ed Barry holds US$7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$604k | US$563k | 54% |
Other | US$515k | US$541k | 46% |
Total Compensation | US$1.1m | US$1.1m | 100% |
Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. It's interesting to note that Capital Bancorp pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Capital Bancorp, Inc.'s Growth Numbers
Capital Bancorp, Inc. saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is down 3.3%.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. 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 Capital Bancorp, Inc. Been A Good Investment?
Given the total shareholder loss of 1.1% over three years, many shareholders in Capital Bancorp, 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...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Capital Bancorp that investors should think about before committing capital to this stock.
Important note: Capital Bancorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
