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Is Lakeland Bancorp, Inc.'s (NASDAQ:LBAI) CEO Overpaid Relative To Its Peers?

Simply Wall St

Tom Shara became the CEO of Lakeland Bancorp, Inc. (NASDAQ:LBAI) in 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Lakeland Bancorp

How Does Tom Shara's Compensation Compare With Similar Sized Companies?

Our data indicates that Lakeland Bancorp, Inc. is worth US$785m, and total annual CEO compensation was reported as US$2.0m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$797k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.

So Tom Shara is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Lakeland Bancorp, below.

NasdaqGS:LBAI CEO Compensation, September 30th 2019
NasdaqGS:LBAI CEO Compensation, September 30th 2019

Is Lakeland Bancorp, Inc. Growing?

Lakeland Bancorp, Inc. has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (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. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Lakeland Bancorp, Inc. Been A Good Investment?

Lakeland Bancorp, Inc. has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Tom Shara is paid around the same as most CEOs of similar size companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying Lakeland Bancorp shares with their own money (free access).

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.

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.

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. Thank you for reading.