Key Insights

• MainStreet Bancshares will host its Annual General Meeting on 15th of May

• Total pay for CEO Jeff Dick includes US$665.7k salary

• The total compensation is 146% higher than the average for the industry

• MainStreet Bancshares' three-year loss to shareholders was 17% while its EPS grew by 8.4% over the past three years

The underwhelming share price performance of MainStreet Bancshares, Inc. (NASDAQ:MNSB) in the past three years would have disappointed many shareholders. 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 15th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 MainStreet Bancshares

Comparing MainStreet Bancshares, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that MainStreet Bancshares, Inc. has a market capitalization of US$122m, and reported total annual CEO compensation of US$1.6m for the year to December 2023. We note that's an increase of 21% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$666k.

For comparison, other companies in the American Banks industry with market capitalizations below US$200m, reported a median total CEO compensation of US$643k. This suggests that Jeff Dick is paid more than the median for the industry. Furthermore, Jeff Dick directly owns US$4.1m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. There isn't a significant difference between MainStreet Bancshares and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

MainStreet Bancshares, Inc.'s Growth

Over the past three years, MainStreet Bancshares, Inc. has seen its earnings per share (EPS) grow by 8.4% per year. Its revenue is down 7.8% over the previous 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. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has MainStreet Bancshares, Inc. Been A Good Investment?

With a three year total loss of 17% for the shareholders, MainStreet Bancshares, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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 did our research and identified 2 warning signs (and 1 which can't be ignored) in MainStreet Bancshares we think you should know about.

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.