Key Insights

• First Interstate BancSystem to hold its Annual General Meeting on 20th of May
• Salary of US$971.4k is part of CEO Kevin Riley's total remuneration
• The total compensation is similar to the average for the industry
• First Interstate BancSystem's EPS declined by 5.2% over the past three years while total shareholder loss over the past three years was 32%

The results at First Interstate BancSystem, Inc. (NASDAQ:FIBK) have been quite disappointing recently and CEO Kevin Riley bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Comparing First Interstate BancSystem, Inc.'s CEO Compensation With The Industry

Our data indicates that First Interstate BancSystem, Inc. has a market capitalization of US$2.9b, and total annual CEO compensation was reported as US$3.4m for the year to December 2023. We note that's a decrease of 27% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$971k.

On comparing similar companies from the American Banks industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$4.7m. So it looks like First Interstate BancSystem compensates Kevin Riley in line with the median for the industry. Furthermore, Kevin Riley directly owns US$4.7m worth of shares in the company, implying that they are deeply invested in the company's success.

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. First Interstate BancSystem sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

First Interstate BancSystem, Inc.'s Growth

First Interstate BancSystem, Inc. has reduced its earnings per share by 5.2% a year over the last three years. Its revenue is down 9.7% over the previous year.

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 First Interstate BancSystem, Inc. Been A Good Investment?

The return of -32% over three years would not have pleased First Interstate BancSystem, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling First Interstate BancSystem (free visualization of insider trades).

Switching gears from First Interstate BancSystem, 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.