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Does Peapack-Gladstone Financial Corporation's (NASDAQ:PGC) CEO Pay Matter?

Simply Wall St

Doug Kennedy has been the CEO of Peapack-Gladstone Financial Corporation (NASDAQ:PGC) since 2012. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Peapack-Gladstone Financial

How Does Doug Kennedy's Compensation Compare With Similar Sized Companies?

According to our data, Peapack-Gladstone Financial Corporation has a market capitalization of US$559m, and paid its CEO total annual compensation worth US$2.4m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$669k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.

Thus we can conclude that Doug Kennedy receives more in total compensation than the median of a group of companies in the same market, and of similar size to Peapack-Gladstone Financial Corporation. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Peapack-Gladstone Financial, below.

NasdaqGS:PGC CEO Compensation, January 15th 2020

Is Peapack-Gladstone Financial Corporation Growing?

Peapack-Gladstone Financial Corporation has increased its earnings per share (EPS) by an average of 15% a year, over the last three years (using a line of best fit). Its revenue is up 5.5% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.

Has Peapack-Gladstone Financial Corporation Been A Good Investment?

With a total shareholder return of 0.7% over three years, Peapack-Gladstone Financial Corporation has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared the total CEO remuneration paid by Peapack-Gladstone Financial Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Peapack-Gladstone Financial (free visualization of insider trades).

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.