Increases to CEO Compensation Might Be Put On Hold For Now at OP Bancorp (NASDAQ:OPBK)

In the past three years, the share price of OP Bancorp (NASDAQ:OPBK) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 24 June 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for OP Bancorp

Comparing OP Bancorp's CEO Compensation With the industry

Our data indicates that OP Bancorp has a market capitalization of US$147m, and total annual CEO compensation was reported as US$1.0m for the year to December 2020. That's a fairly small increase of 4.0% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$494k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$532k. Accordingly, our analysis reveals that OP Bancorp pays Min Kim north of the industry median. Furthermore, Min Kim directly owns US$3.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 51% of total compensation out of all the companies we analyzed, while other remuneration made up 49% of the pie. Although there is a difference in how total compensation is set, OP Bancorp more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

OP Bancorp's Growth

Over the past three years, OP Bancorp has seen its earnings per share (EPS) grow by 8.9% per year. It achieved revenue growth of 1.7% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has OP Bancorp Been A Good Investment?

Given the total shareholder loss of 19% over three years, many shareholders in OP Bancorp are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is concerning) in OP Bancorp we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.