In 2016 John Watt was appointed CEO of NBT Bancorp Inc. (NASDAQ:NBTB). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does John Watt's Compensation Compare With Similar Sized Companies?
Our data indicates that NBT Bancorp Inc. is worth US$1.8b, and total annual CEO compensation was reported as US$2.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$725k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.9m.
Most shareholders would consider it a positive that John Watt takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at NBT Bancorp has changed over time.
Is NBT Bancorp Inc. Growing?
Over the last three years NBT Bancorp Inc. has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). It achieved revenue growth of 5.2% over the last year.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has NBT Bancorp Inc. Been A Good Investment?
NBT Bancorp Inc. has not done too badly by shareholders, with a total return of 6.2%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It looks like NBT Bancorp Inc. pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that John Watt is paid too much. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. So you may want to check if insiders are buying NBT Bancorp shares with their own money (free access).
If you want to buy a stock that is better than NBT Bancorp, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.