In 2013 Tom Murphy was appointed CEO of Arrow Financial Corporation (NASDAQ:AROW). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tom Murphy's Compensation Compare With Similar Sized Companies?
According to our data, Arrow Financial Corporation has a market capitalization of US$475m, and pays its CEO total annual compensation worth US$1.3m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$490k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.9m.
That means Tom Murphy receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Arrow Financial, below.
Is Arrow Financial Corporation Growing?
Arrow Financial Corporation has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 4.3%.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Arrow Financial Corporation Been A Good Investment?
Arrow Financial Corporation has served shareholders reasonably well, with a total return of 23% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Tom Murphy is paid around what is normal the leaders of comparable size companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying Arrow Financial shares with their own money (free access).
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.
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