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In the past three years, the share price of Cass Information Systems, Inc. (NASDAQ:CASS) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20 April 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
How Does Total Compensation For Eric Brunngraber Compare With Other Companies In The Industry?
According to our data, Cass Information Systems, Inc. has a market capitalization of US$657m, and paid its CEO total annual compensation worth US$3.4m over the year to December 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$694k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$1.9m. This suggests that Eric Brunngraber is paid more than the median for the industry. What's more, Eric Brunngraber holds US$4.9m 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 14% of total compensation represents salary and 86% is other remuneration. Cass Information Systems pays out 20% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Cass Information Systems, Inc.'s Growth Numbers
Cass Information Systems, Inc. saw earnings per share stay pretty flat over the last three years. It saw its revenue drop 8.9% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Cass Information Systems, Inc. Been A Good Investment?
With a three year total loss of 3.5% for the shareholders, Cass Information Systems, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
Shareholders may want to check for free if Cass Information Systems insiders are buying or selling shares.
Important note: Cass Information Systems is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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