What We Learned About First Financial Northwest's (NASDAQ:FFNW) CEO Compensation

Joe Kiley became the CEO of First Financial Northwest, Inc. (NASDAQ:FFNW) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for First Financial Northwest.

View our latest analysis for First Financial Northwest

Comparing First Financial Northwest, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that First Financial Northwest, Inc. has a market capitalization of US$91m, and reported total annual CEO compensation of US$674k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at US$464.4k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$644k. So it looks like First Financial Northwest compensates Joe Kiley in line with the median for the industry. What's more, Joe Kiley holds US$522k worth of shares in the company in their own name.

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. First Financial Northwest 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.

A Look at First Financial Northwest, Inc.'s Growth Numbers

Earnings per share at First Financial Northwest, Inc. are much the same as they were three years ago, albeit slightly lower. In the last year, its revenue changed by just 0.1%.

A lack of earnings per share improvement is not good to see. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has First Financial Northwest, Inc. Been A Good Investment?

With a three year total loss of 37% for the shareholders, First Financial Northwest, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, First Financial Northwest pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for First Financial Northwest that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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