A Look At OptimumBank Holdings' (NASDAQ:OPHC) CEO Remuneration

This article will reflect on the compensation paid to Tim Terry who has served as CEO of OptimumBank Holdings, Inc. (NASDAQ:OPHC) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for OptimumBank Holdings.

View our latest analysis for OptimumBank Holdings

Comparing OptimumBank Holdings, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that OptimumBank Holdings, Inc. has a market capitalization of US$7.1m, and reported total annual CEO compensation of US$233k for the year to December 2019. That is, the compensation was roughly the same as last year. In particular, the salary of US$225.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$650k. In other words, OptimumBank Holdings pays its CEO lower than the industry median.

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. Investors will find it interesting that OptimumBank Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

OptimumBank Holdings, Inc.'s Growth

Over the last three years, OptimumBank Holdings, Inc. has shrunk its earnings per share by 19% per year. It achieved revenue growth of 16% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has OptimumBank Holdings, Inc. Been A Good Investment?

OptimumBank Holdings, Inc. has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Tim receives almost all of their compensation through a salary. As we noted earlier, OptimumBank Holdings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. And revenue growth for the company is showing some positive trends.And revenues are growing at a healthy clip.And revenues are increasing at a good pace over the past year. But we were hoping for higher shareholder returns and positive EPS growth during this stretch, which, unfortunately, did not materialize. We won't say CEO compensation is inappropriate, but shareholders will likely want to see healthier returns before they agree the company deserves a raise.

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 5 warning signs for OptimumBank Holdings you should be aware of, and 3 of them are concerning.

Switching gears from OptimumBank Holdings, 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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