Does First Commonwealth Financial Corporation's (NYSE:FCF) CEO Pay Reflect Performance?
Mike Price has been the CEO of First Commonwealth Financial Corporation (NYSE:FCF) since 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for First Commonwealth Financial
How Does Mike Price's Compensation Compare With Similar Sized Companies?
According to our data, First Commonwealth Financial Corporation has a market capitalization of US$1.4b, and paid its CEO total annual compensation worth US$1.2m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$472k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.0m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at First Commonwealth Financial has changed from year to year.
Is First Commonwealth Financial Corporation Growing?
First Commonwealth Financial Corporation has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 3.6%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has First Commonwealth Financial Corporation Been A Good Investment?
Most shareholders would probably be pleased with First Commonwealth Financial Corporation for providing a total return of 40% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
First Commonwealth Financial Corporation is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Mike Price deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling First Commonwealth Financial shares (free trial).
If you want to buy a stock that is better than First Commonwealth Financial, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
