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Doug Kennedy has been the CEO of Peapack-Gladstone Financial Corporation (NASDAQ:PGC) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Peapack-Gladstone Financial pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Doug Kennedy Compare With Other Companies In The Industry?
At the time of writing, our data shows that Peapack-Gladstone Financial Corporation has a market capitalization of US$330m, and reported total annual CEO compensation of US$2.2m for the year to December 2019. That's a slight decrease of 5.8% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$695k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.2m. Accordingly, our analysis reveals that Peapack-Gladstone Financial Corporation pays Doug Kennedy north of the industry median. What's more, Doug Kennedy holds US$2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. Peapack-Gladstone Financial pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Peapack-Gladstone Financial Corporation's Growth
Peapack-Gladstone Financial Corporation saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is down 2.2%.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Peapack-Gladstone Financial Corporation Been A Good Investment?
Since shareholders would have lost about 37% over three years, some Peapack-Gladstone Financial Corporation investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Peapack-Gladstone Financial Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. 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 great when you consider Doug is taking home compensation north of the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.
Whatever your view on compensation, you might want to check if insiders are buying or selling Peapack-Gladstone Financial shares (free trial).
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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