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Dick Grafmyre became the CEO of Penns Woods Bancorp, Inc. (NASDAQ:PWOD) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Penns Woods Bancorp pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Penns Woods Bancorp, Inc.'s CEO Compensation With the industry
According to our data, Penns Woods Bancorp, Inc. has a market capitalization of US$183m, and paid its CEO total annual compensation worth US$1.3m over the year to December 2019. That's a notable increase of 26% on last year. In particular, the salary of US$825.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$816k. Hence, we can conclude that Dick Grafmyre is remunerated higher than the industry median. Moreover, Dick Grafmyre also holds US$208k worth of Penns Woods Bancorp stock directly under their own name.
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Penns Woods Bancorp is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Penns Woods Bancorp, Inc.'s Growth Numbers
Over the past three years, Penns Woods Bancorp, Inc. has seen its earnings per share (EPS) grow by 5.8% per year. Its revenue is down 4.3% over the previous year.
We would prefer it if there was revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Penns Woods Bancorp, Inc. Been A Good Investment?
Since shareholders would have lost about 10.0% over three years, some Penns Woods Bancorp, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Dick is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. This doesn't look good when you see that Dick is earning more than the industry median. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Penns Woods Bancorp that investors should look into moving forward.
Switching gears from Penns Woods Bancorp, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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