This article will reflect on the compensation paid to Joe Kiley who has served as CEO of First Financial Northwest, Inc. (NASDAQ:FFNW) since 2013. This analysis will also assess whether First Financial Northwest pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Joe Kiley Compare With Other Companies In The Industry?
Our data indicates that First Financial Northwest, Inc. has a market capitalization of US$91m, and total annual CEO compensation was reported as US$674k for the year to December 2019. That’s mostly flat as compared to the prior year’s compensation. Notably, the salary which is US$464.4k, represents most of the total compensation being paid.
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. From this we gather that Joe Kiley is paid around the median for CEOs in the industry. Furthermore, Joe Kiley directly owns US$522k worth of shares in the company.
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. According to our research, First Financial Northwest has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
First Financial Northwest, Inc.’s Growth
Earnings per share at First Financial Northwest, Inc. are much the same as they were three years ago, albeit slightly lower. The trailing twelve months of revenue was pretty much the same as the prior period.
Its a bit disappointing to see that the company has failed to grow its earnings. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 First Financial Northwest, Inc. Been A Good Investment?
Since shareholders would have lost about 37% over three years, some First Financial Northwest, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
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. That’s why we did some digging and identified 2 warning signs for First Financial Northwest that investors should think about before committing capital to this stock.
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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