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Dennis Pollack became the CEO of Prudential Bancorp, Inc. (NASDAQ:PBIP) in 2016, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Prudential Bancorp.
Comparing Prudential Bancorp, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Prudential Bancorp, Inc. has a market capitalization of US$96m, and reported total annual CEO compensation of US$780k for the year to September 2020. That's a fairly small increase of 7.2% over the previous year. We note that the salary portion, which stands at US$462.3k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$524k. Hence, we can conclude that Dennis Pollack is remunerated higher than the industry median. What's more, Dennis Pollack holds US$810k worth of shares in the company in their own name.
Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. Our data reveals that Prudential Bancorp allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Prudential Bancorp, Inc.'s Growth
Prudential Bancorp, Inc. has seen its earnings per share (EPS) increase by 50% a year over the past three years. Revenue was pretty flat on last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Prudential Bancorp, Inc. Been A Good Investment?
Given the total shareholder loss of 25% over three years, many shareholders in Prudential Bancorp, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Prudential Bancorp pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Prudential Bancorp that investors should think about before committing capital to this stock.
Switching gears from Prudential Bancorp, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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