In This Article:
This article will reflect on the compensation paid to Tony McKim who has served as CEO of The First Bancorp, Inc. (NASDAQ:FNLC) since 2015. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for First Bancorp
Comparing The First Bancorp, Inc.'s CEO Compensation With the industry
Our data indicates that The First Bancorp, Inc. has a market capitalization of US$275m, and total annual CEO compensation was reported as US$956k for the year to December 2019. That's a notable increase of 11% on last year. We note that the salary portion, which stands at US$545.0k constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$799k. From this we gather that Tony McKim is paid around the median for CEOs in the industry. What's more, Tony McKim holds US$2.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$545k | US$520k | 57% |
| Other | US$411k | US$338k | 43% |
| Total Compensation | US$956k | US$858k | 100% |
On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. First Bancorp is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
The First Bancorp, Inc.'s Growth
Over the past three years, The First Bancorp, Inc. has seen its earnings per share (EPS) grow by 12% per year. Its revenue is up 8.7% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has The First Bancorp, Inc. Been A Good Investment?
The First Bancorp, Inc. has not done too badly by shareholders, with a total return of 5.8%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
As previously discussed, Tony is compensated close to the median for companies of its size, and which belong to the same industry. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.