David Silverman has been the CEO of Union Bankshares, Inc. (NASDAQ:UNB) 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 Union Bankshares pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Union Bankshares, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Union Bankshares, Inc. has a market capitalization of US$87m, and reported total annual CEO compensation of US$609k for the year to December 2019. That's a notable increase of 17% on last year. In particular, the salary of US$386.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$639k. This suggests that Union Bankshares remunerates its CEO largely in line with the industry average. Moreover, David Silverman also holds US$377k worth of Union Bankshares stock directly under their own name.
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Union Bankshares pays out a greater portion of remuneration through salary, compared to the industry. 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.
Union Bankshares, Inc.'s Growth
Union Bankshares, Inc.'s earnings per share (EPS) grew 5.6% per year over the last three years. It achieved revenue growth of 6.0% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Union Bankshares, Inc. Been A Good Investment?
Given the total shareholder loss of 53% over three years, many shareholders in Union Bankshares, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, Union Bankshares, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Union Bankshares (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Union Bankshares, 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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