Here's Why Some Shareholders May Not Be Too Generous With Peoples Financial Services Corp.'s (NASDAQ:PFIS) CEO Compensation This Year
Key Insights
Peoples Financial Services will host its Annual General Meeting on 11th of May
Total pay for CEO Craig Best includes US$472.4k salary
The overall pay is comparable to the industry average
Over the past three years, Peoples Financial Services' EPS fell by 11% and over the past three years, the total shareholder return was 0.9%
Share price growth at Peoples Financial Services Corp. (NASDAQ:PFIS) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. Some of these issues will occupy shareholders' minds as the AGM rolls around on 11th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
See our latest analysis for Peoples Financial Services
Comparing Peoples Financial Services Corp.'s CEO Compensation With The Industry
Our data indicates that Peoples Financial Services Corp. has a market capitalization of US$279m, and total annual CEO compensation was reported as US$927k for the year to December 2023. We note that's a small decrease of 6.6% on last year. We note that the salary of US$472.4k makes up a sizeable portion of the total compensation received by the CEO.
In comparison with other companies in the American Banks industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.0m. So it looks like Peoples Financial Services compensates Craig Best in line with the median for the industry. Moreover, Craig Best also holds US$1.5m worth of Peoples Financial Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$472k | US$460k | 51% |
Other | US$455k | US$532k | 49% |
Total Compensation | US$927k | US$992k | 100% |
On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. Peoples Financial Services pays out 51% of remuneration in the form of a salary, significantly higher than the industry average. 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.
Peoples Financial Services Corp.'s Growth
Over the last three years, Peoples Financial Services Corp. has shrunk its earnings per share by 11% per year. It saw its revenue drop 10% over the last year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Peoples Financial Services Corp. Been A Good Investment?
With a total shareholder return of 0.9% over three years, Peoples Financial Services Corp. has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.
In Summary...
The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns 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 Peoples Financial Services insiders are buying or selling shares.
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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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.
