Key Insights

• Eagle Bancorp's Annual General Meeting to take place on 16th of May
• CEO Susan Riel's total compensation includes salary of US$907.4k
• The overall pay is 125% above the industry average
• Eagle Bancorp's EPS declined by 19% over the past three years while total shareholder loss over the past three years was 57%

Eagle Bancorp, Inc. (NASDAQ:EGBN) has not performed well recently and CEO Susan Riel will probably need to up their game. At the upcoming AGM on 16th of May, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

How Does Total Compensation For Susan Riel Compare With Other Companies In The Industry?

Our data indicates that Eagle Bancorp, Inc. has a market capitalization of US$597m, and total annual CEO compensation was reported as US$3.2m for the year to December 2023. We note that's a decrease of 28% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$907k.

In comparison with other companies in the American Banks industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.4m. Accordingly, our analysis reveals that Eagle Bancorp, Inc. pays Susan Riel north of the industry median. Moreover, Susan Riel also holds US$7.1m worth of Eagle Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. Eagle Bancorp pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Eagle Bancorp, Inc.'s Growth Numbers

Over the last three years, Eagle Bancorp, Inc. has shrunk its earnings per share by 19% per year. In the last year, its revenue is down 25%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Eagle Bancorp, Inc. Been A Good Investment?

With a total shareholder return of -57% over three years, Eagle Bancorp, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Eagle Bancorp that investors should be aware of in a dynamic business environment.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.