Shareholders May Find It Hard To Justify Increasing Home Bancorp, Inc.'s (NASDAQ:HBCP) CEO Compensation For Now

editorial-team@simplywallst.com (Simply Wall St)

1 May 2024 at 6:24 am·4-min read

Key Insights

Home Bancorp's Annual General Meeting to take place on 7th of May
CEO John Bordelon's total compensation includes salary of US$484.6k
Total compensation is similar to the industry average
Over the past three years, Home Bancorp's EPS grew by 5.4% and over the past three years, the total loss to shareholders 2.4%

In the past three years, shareholders of Home Bancorp, Inc. (NASDAQ:HBCP) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 7th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Home Bancorp

Comparing Home Bancorp, Inc.'s CEO Compensation With The Industry

According to our data, Home Bancorp, Inc. has a market capitalization of US$285m, and paid its CEO total annual compensation worth US$961k over the year to December 2023. That is, the compensation was roughly the same as last year. We note that the salary of US$484.6k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the American Banks industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.1m. This suggests that Home Bancorp remunerates its CEO largely in line with the industry average. Furthermore, John Bordelon directly owns US$6.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$485k	US$454k	50%
Other	US$477k	US$484k	50%
Total Compensation	US$961k	US$939k	100%

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. According to our research, Home Bancorp 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.

Home Bancorp, Inc.'s Growth

Over the past three years, Home Bancorp, Inc. has seen its earnings per share (EPS) grow by 5.4% per year. It saw its revenue drop 2.8% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Home Bancorp, Inc. Been A Good Investment?

Given the total shareholder loss of 2.4% over three years, many shareholders in Home Bancorp, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Home Bancorp (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Switching gears from Home Bancorp, 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.

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

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.

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Key Insights

Comparing Home Bancorp, Inc.'s CEO Compensation With The Industry

Home Bancorp, Inc.'s Growth

Has Home Bancorp, Inc. Been A Good Investment?

To Conclude...

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