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Key Things To Understand About Lakeland Bancorp's (NASDAQ:LBAI) CEO Pay Cheque

Simply Wall St

Tom Shara has been the CEO of Lakeland Bancorp, Inc. (NASDAQ:LBAI) since 2008, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Lakeland Bancorp.

View our latest analysis for Lakeland Bancorp

Comparing Lakeland Bancorp, Inc.'s CEO Compensation With the industry

Our data indicates that Lakeland Bancorp, Inc. has a market capitalization of US$488m, and total annual CEO compensation was reported as US$2.0m for the year to December 2019. That's just a smallish increase of 3.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$829k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.3m. Hence, we can conclude that Tom Shara is remunerated higher than the industry median. What's more, Tom Shara holds US$2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$829k

US$797k

41%

Other

US$1.2m

US$1.2m

59%

Total Compensation

US$2.0m

US$2.0m

100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. Lakeland Bancorp is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Lakeland Bancorp, Inc.'s Growth

Lakeland Bancorp, Inc.'s earnings per share (EPS) grew 4.8% per year over the last three years. Revenue was pretty flat on last year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Lakeland Bancorp, Inc. Been A Good Investment?

Given the total shareholder loss of 47% over three years, many shareholders in Lakeland Bancorp, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Tom is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing for Lakeland Bancorp, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look great when you consider Tom is taking home compensation north of the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Lakeland Bancorp.

Important note: Lakeland Bancorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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@simplywallst.com.