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Kevin McPhaill has been the CEO of Sierra Bancorp (NASDAQ:BSRR) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Sierra Bancorp.
See our latest analysis for Sierra Bancorp
How Does Total Compensation For Kevin McPhaill Compare With Other Companies In The Industry?
At the time of writing, our data shows that Sierra Bancorp has a market capitalization of US$362m, and reported total annual CEO compensation of US$1.1m for the year to December 2019. That's a notable increase of 12% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$525k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.1m. From this we gather that Kevin McPhaill is paid around the median for CEOs in the industry. What's more, Kevin McPhaill holds US$1.2m worth of shares in the company in their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$525k | US$475k | 49% |
| Other | US$538k | US$475k | 51% |
| Total Compensation | US$1.1m | US$950k | 100% |
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Sierra Bancorp pays out 49% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Sierra Bancorp's Growth
Over the past three years, Sierra Bancorp has seen its earnings per share (EPS) grow by 16% per year. Its revenue is up 3.3% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Sierra Bancorp Been A Good Investment?
Since shareholders would have lost about 2.9% over three years, some Sierra Bancorp investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we touched on above, Sierra Bancorp is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Kevin is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.