Here's What We Think About Mercantile Bank's (NASDAQ:MBWM) CEO Pay

This article will reflect on the compensation paid to Bob Kaminski who has served as CEO of Mercantile Bank Corporation (NASDAQ:MBWM) since 2017. 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 Mercantile Bank

How Does Total Compensation For Bob Kaminski Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mercantile Bank Corporation has a market capitalization of US$361m, and reported total annual CEO compensation of US$1.0m for the year to December 2019. That's a fairly small increase of 6.6% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$499k.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.3m. So it looks like Mercantile Bank compensates Bob Kaminski in line with the median for the industry. What's more, Bob Kaminski holds US$1.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. According to our research, Mercantile Bank has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Mercantile Bank Corporation's Growth Numbers

Mercantile Bank Corporation's earnings per share (EPS) grew 12% per year over the last three years. Its revenue is up 2.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Mercantile Bank Corporation Been A Good Investment?

Given the total shareholder loss of 31% over three years, many shareholders in Mercantile Bank Corporation are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Bob is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of 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 2 warning signs for Mercantile Bank you should be aware of, and 1 of them is a bit concerning.

Switching gears from Mercantile Bank, 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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