What Can We Conclude About Norwood Financial's (NASDAQ:NWFL) CEO Pay?
This article will reflect on the compensation paid to Lew Critelli who has served as CEO of Norwood Financial Corp. (NASDAQ:NWFL) since 2010. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Norwood Financial
How Does Total Compensation For Lew Critelli Compare With Other Companies In The Industry?
According to our data, Norwood Financial Corp. has a market capitalization of US$199m, and paid its CEO total annual compensation worth US$640k over the year to December 2019. That's a notable increase of 10% on last year. In particular, the salary of US$370.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$887k. So it looks like Norwood Financial compensates Lew Critelli in line with the median for the industry. Moreover, Lew Critelli also holds US$1.5m worth of Norwood Financial 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$370k | US$325k | 58% |
Other | US$270k | US$257k | 42% |
Total Compensation | US$640k | US$582k | 100% |
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Norwood Financial pays out 58% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Norwood Financial Corp.'s Growth
Norwood Financial Corp. has seen its earnings per share (EPS) increase by 5.3% a year over the past three years. In the last year, its revenue is up 9.2%.
We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Norwood Financial Corp. Been A Good Investment?
Since shareholders would have lost about 8.0% over three years, some Norwood Financial Corp. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As previously discussed, Lew is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, Norwood Financial is suffering from adverse shareholder returns and althoughEPS have grown over the past three years, they have not been extraordinary. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Lew deserves a raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Norwood Financial that investors should think about before committing capital to this stock.
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.
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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