This article will reflect on the compensation paid to Peter Ho who has served as CEO of Bank of Hawaii Corporation (NYSE:BOH) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Bank of Hawaii.
How Does Total Compensation For Peter Ho Compare With Other Companies In The Industry?
According to our data, Bank of Hawaii Corporation has a market capitalization of US$2.1b, and paid its CEO total annual compensation worth US$5.3m over the year to December 2019. That’s mostly flat as compared to the prior year’s compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$818k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$3.2m. Accordingly, our analysis reveals that Bank of Hawaii Corporation pays Peter Ho north of the industry median. Moreover, Peter Ho also holds US$11m worth of Bank of Hawaii stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
|---|---|---|---|
| Salary | US$818k | US$795k | 15% |
| Other | US$4.5m | US$4.4m | 85% |
| Total Compensation | US$5.3m | US$5.2m | 100% |
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. Bank of Hawaii sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.
A Look at Bank of Hawaii Corporation’s Growth Numbers
Bank of Hawaii Corporation has seen its earnings per share (EPS) increase by 2.3% a year over the past three years. In the last year, its revenue is down 6.7%.
We would prefer it if there was revenue growth, 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 Bank of Hawaii Corporation Been A Good Investment?
Given the total shareholder loss of 31% over three years, many shareholders in Bank of Hawaii Corporation are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary…
As we noted earlier, Bank of Hawaii pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Bank of Hawaii, and although EPS growth is steady, it hasn’t set the world on fire. This doesn’t look great when you consider Peter is taking home compensation north of the industry average. All things considered, we believe shareholders would be disappointed to see Peter’s compensation grow without first seeing an improvement in the performance of the company.
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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