Key Insights

• First National's Annual General Meeting to take place on 8th of May
• Salary of US$435.9k is part of CEO Scott Harvard's total remuneration
• The overall pay is comparable to the industry average
• First National's three-year loss to shareholders was 12% while its EPS was down 10% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at First National Corporation (NASDAQ:FXNC) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 8th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Comparing First National Corporation's CEO Compensation With The Industry

Our data indicates that First National Corporation has a market capitalization of US$93m, and total annual CEO compensation was reported as US$593k for the year to December 2023. Notably, that's a decrease of 23% over the year before. In particular, the salary of US$435.9k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the American Banks industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$643k. So it looks like First National compensates Scott Harvard in line with the median for the industry. Furthermore, Scott Harvard directly owns US$1.0m worth of shares in the company.

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. It's interesting to note that First National pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at First National Corporation's Growth Numbers

First National Corporation has reduced its earnings per share by 10% a year over the last three years. It saw its revenue drop 14% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 First National Corporation Been A Good Investment?

Since shareholders would have lost about 12% over three years, some First National Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for First National that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.