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How Much Did Western New England Bancorp, Inc.'s (NASDAQ:WNEB) CEO Pocket Last Year?

Simply Wall St
·4 min read

In 2008, Jim Hagan was appointed CEO of Western New England Bancorp, Inc. (NASDAQ:WNEB). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Western New England Bancorp

How Does Jim Hagan's Compensation Compare With Similar Sized Companies?

Our data indicates that Western New England Bancorp, Inc. is worth US$131m, and total annual CEO compensation was reported as US$846k for the year to December 2019. We note that's an increase of 12% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$505k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$614k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Western New England Bancorp. On a sector level, around 60% of total compensation represents salary and 40% is other remuneration. So it seems like there isn't a significant difference between Western New England Bancorp and the broader market, in terms of salary allocation in the overall compensation package.

Thus we can conclude that Jim Hagan receives more in total compensation than the median of a group of companies in the same market, and of similar size to Western New England Bancorp, Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Western New England Bancorp has changed from year to year.

NasdaqGS:WNEB CEO Compensation May 7th 2020
NasdaqGS:WNEB CEO Compensation May 7th 2020

Is Western New England Bancorp, Inc. Growing?

On average over the last three years, Western New England Bancorp, Inc. has seen earnings per share (EPS) move in a favourable direction by 9.6% each year (using a line of best fit). In the last year, its revenue is down 5.3%.

I generally like to see a little revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Western New England Bancorp, Inc. Been A Good Investment?

Since shareholders would have lost about 49% over three years, some Western New England Bancorp, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Western New England Bancorp, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. This contrasts with the growth in CEO remuneration, in the last year. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Taking a breather from CEO compensation, we've spotted 3 warning signs for Western New England Bancorp (of which 1 is a bit concerning!) you should know about in order to have a holistic understanding of the stock.

Important note: Western New England Bancorp may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.