It Looks Like Elmira Savings Bank's (NASDAQ:ESBK) CEO May Expect Their Salary To Be Put Under The Microscope
The results at Elmira Savings Bank (NASDAQ:ESBK) have been quite disappointing recently and CEO Tom Carr bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27 April 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Elmira Savings Bank
How Does Total Compensation For Tom Carr Compare With Other Companies In The Industry?
Our data indicates that Elmira Savings Bank has a market capitalization of US$49m, and total annual CEO compensation was reported as US$535k for the year to December 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of US$399.5k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$523k. So it looks like Elmira Savings Bank compensates Tom Carr in line with the median for the industry. Furthermore, Tom Carr directly owns US$2.7m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$399k | US$389k | 75% |
Other | US$135k | US$158k | 25% |
Total Compensation | US$535k | US$547k | 100% |
On an industry level, roughly 51% of total compensation represents salary and 49% is other remuneration. It's interesting to note that Elmira Savings Bank pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Elmira Savings Bank's Growth
Over the last three years, Elmira Savings Bank has not seen its earnings per share change much, though they have deteriorated slightly. It achieved revenue growth of 9.4% over the last year.
Its a bit disappointing to see that the company has failed to grow its EPS. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Elmira Savings Bank Been A Good Investment?
Since shareholders would have lost about 19% over three years, some Elmira Savings Bank investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Elmira Savings Bank that investors should think about before committing capital to this stock.
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.
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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