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Ned Handy became the CEO of Washington Trust Bancorp, Inc. (NASDAQ:WASH) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Ned Handy Compare With Other Companies In The Industry?
At the time of writing, our data shows that Washington Trust Bancorp, Inc. has a market capitalization of US$546m, and reported total annual CEO compensation of US$1.6m for the year to December 2019. Notably, that's a decrease of 9.5% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$600k.
On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.2m. From this we gather that Ned Handy is paid around the median for CEOs in the industry. What's more, Ned Handy holds US$461k worth of shares in the company in their own name.
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. In Washington Trust Bancorp's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Washington Trust Bancorp, Inc.'s Growth
Washington Trust Bancorp, Inc.'s earnings per share (EPS) grew 10% per year over the last three years. It achieved revenue growth of 2.0% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Washington Trust Bancorp, Inc. Been A Good Investment?
With a three year total loss of 36% for the shareholders, Washington Trust Bancorp, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Washington Trust Bancorp, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, the company has logged negative shareholder returns over the previous three years. But on the bright side, EPS growth is positive over the same period. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Washington Trust Bancorp that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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