How Much Did Provident Bancorp's (NASDAQ:PVBC) CEO Pocket Last Year?
Dave Mansfield became the CEO of Provident Bancorp, Inc. (NASDAQ:PVBC) in 2013, 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 Provident Bancorp pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Provident Bancorp
Comparing Provident Bancorp, Inc.'s CEO Compensation With the industry
Our data indicates that Provident Bancorp, Inc. has a market capitalization of US$142m, and total annual CEO compensation was reported as US$785k for the year to December 2019. That's just a smallish increase of 3.7% on last year. Notably, the salary which is US$500.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$518k. This suggests that Dave Mansfield is paid more than the median for the industry. Furthermore, Dave Mansfield directly owns US$1.4m worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$500k | US$480k | 64% |
Other | US$285k | US$277k | 36% |
Total Compensation | US$785k | US$757k | 100% |
On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. Although there is a difference in how total compensation is set, Provident Bancorp more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Provident Bancorp, Inc.'s Growth
Provident Bancorp, Inc. has seen its earnings per share (EPS) increase by 17% a year over the past three years. In the last year, its revenue is up 14%.
This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Provident Bancorp, Inc. Been A Good Investment?
Given the total shareholder loss of 21% over three years, many shareholders in Provident Bancorp, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Provident Bancorp pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Provident Bancorp that investors should be aware of in a dynamic business environment.
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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