David Turner became the CEO of Hawthorn Bancshares, Inc. (NASDAQ:HWBK) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Hawthorn Bancshares.
Comparing Hawthorn Bancshares, Inc.'s CEO Compensation With the industry
According to our data, Hawthorn Bancshares, Inc. has a market capitalization of US$128m, and paid its CEO total annual compensation worth US$655k over the year to December 2019. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at US$476.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$631k. So it looks like Hawthorn Bancshares compensates David Turner in line with the median for the industry. What's more, David Turner holds US$1.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Hawthorn Bancshares pays out 73% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Hawthorn Bancshares, Inc.'s Growth
Over the past three years, Hawthorn Bancshares, Inc. has seen its earnings per share (EPS) grow by 19% per year. It saw its revenue drop 1.2% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Hawthorn Bancshares, Inc. Been A Good Investment?
With a total shareholder return of 16% over three years, Hawthorn Bancshares, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As previously discussed, David is compensated close to the median for companies of its size, and which belong to the same industry. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Hawthorn Bancshares that investors should be aware of in a dynamic business environment.
Switching gears from Hawthorn Bancshares, 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.
This article by Simply Wall St is general in nature. 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.
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