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Here's Why Shareholders May Want To Be Cautious With Increasing Cortland Bancorp's (NASDAQ:CLDB) CEO Pay Packet

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Under the guidance of CEO Jim Gasior, Cortland Bancorp (NASDAQ:CLDB) has performed reasonably well recently. As shareholders go into the upcoming AGM on 18 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Cortland Bancorp

How Does Total Compensation For Jim Gasior Compare With Other Companies In The Industry?

Our data indicates that Cortland Bancorp has a market capitalization of US$97m, and total annual CEO compensation was reported as US$863k for the year to December 2020. That's a notable increase of 26% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$315k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$572k. This suggests that Jim Gasior is paid more than the median for the industry. What's more, Jim Gasior holds US$1.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$315k

US$297k

36%

Other

US$548k

US$386k

64%

Total Compensation

US$863k

US$683k

100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. Cortland Bancorp pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Cortland Bancorp's Growth

Over the past three years, Cortland Bancorp has seen its earnings per share (EPS) grow by 28% per year. In the last year, its revenue is up 11%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Cortland Bancorp Been A Good Investment?

With a total shareholder return of 18% over three years, Cortland Bancorp 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.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Cortland 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.