Key Insights

• Home Bancorp to hold its Annual General Meeting on 7th of May
• Total pay for CEO John Bordelon includes US$484.6k salary
• The overall pay is comparable to the industry average
• Home Bancorp's three-year loss to shareholders was 2.4% while its EPS grew by 5.4% over the past three years

In the past three years, shareholders of Home Bancorp, Inc. (NASDAQ:HBCP) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 7th of May. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For John Bordelon Compare With Other Companies In The Industry?

At the time of writing, our data shows that Home Bancorp, Inc. has a market capitalization of US$285m, and reported total annual CEO compensation of US$961k for the year to December 2023. That is, the compensation was roughly the same as last year. Notably, the salary which is US$484.6k, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the American Banks industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.1m. So it looks like Home Bancorp compensates John Bordelon in line with the median for the industry. Moreover, John Bordelon also holds US$6.5m worth of Home Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. It's interesting to note that Home Bancorp pays out a greater portion of remuneration through salary, compared to the 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.

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

Over the past three years, Home Bancorp, Inc. has seen its earnings per share (EPS) grow by 5.4% per year. In the last year, its revenue is down 2.8%.

We would prefer it if there was revenue growth, 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?

With a three year total loss of 2.4% for the shareholders, Home Bancorp, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 is significant!) that you should be aware of before investing here.

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.