In 2013 Dave Mansfield was appointed CEO of Provident Bancorp, Inc. (NASDAQ:PVBC). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 Dave Mansfield's Compensation Compare With Similar Sized Companies?
According to our data, Provident Bancorp, Inc. has a market capitalization of US$234m, and paid its CEO total annual compensation worth US$757k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$480k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.
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.
The graphic below shows how CEO compensation at Provident Bancorp has changed from year to year.
Is Provident Bancorp, Inc. Growing?
Over the last three years Provident Bancorp, Inc. has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). Its revenue is up 11% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Provident Bancorp, Inc. Been A Good Investment?
With a total shareholder return of 26% over three years, Provident Bancorp, Inc. shareholders would, in general, be reasonably content. 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.
It appears that Provident Bancorp, Inc. remunerates its CEO below most similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The total shareholder return might not be amazing, but that doesn't mean that Dave Mansfield is paid too much. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Provident Bancorp.
Important note: Provident Bancorp may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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