In 2013 Tom Murphy was appointed CEO of Arrow Financial Corporation (NASDAQ:AROW). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Tom Murphy’s Compensation Compare With Similar Sized Companies?
According to our data, Arrow Financial Corporation has a market capitalization of US$504m, and pays its CEO total annual compensation worth US$816k. That’s a notable increase of 21% on last year. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO compensation was US$2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Arrow Financial has changed over time.
Is Arrow Financial Corporation Growing?
On average over the last three years, Arrow Financial Corporation has grown earnings per share (EPS) by 11% each year. It achieved revenue growth of 7.2% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Arrow Financial Corporation Been A Good Investment?
I think that the total shareholder return of 50%, over three years, would leave most Arrow Financial Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It appears that Arrow Financial Corporation remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Tom Murphy deserves a raise!
It’s not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Arrow Financial Corporation (free visualization of insider trades).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.