In 2010, Lew Critelli was appointed CEO of Norwood Financial Corp. (NASDAQ:NWFL). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 Lew Critelli’s Compensation Compare With Similar Sized Companies?
According to our data, Norwood Financial Corp. has a market capitalization of US$156m, and paid its CEO total annual compensation worth US$640k over the year to December 2019. Notably, that’s an increase of 10% over the year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$370k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.3m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Norwood Financial. Speaking on an industry level, we can see that nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Norwood Financial is paying a higher share of its remuneration through a salary in comparison to the overall industry.
At first glance this seems like a real positive for shareholders, since Lew Critelli is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business. You can see, below, how CEO compensation at Norwood Financial has changed over time.
Is Norwood Financial Corp. Growing?
On average over the last three years, Norwood Financial Corp. has seen earnings per share (EPS) move in a favourable direction by 22% each year (using a line of best fit). In the last year, its revenue is up 4.1%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don’t have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Norwood Financial Corp. Been A Good Investment?
Norwood Financial Corp. has generated a total shareholder return of 1.7% over three years, so most shareholders wouldn’t be too disappointed. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
It looks like Norwood Financial Corp. pays its CEO less than similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn’t mean that Lew Critelli is paid too much. It’s good to see reasonable payment of the CEO, even while the business improves. But it would be nice if insiders were also buying shares. Moving away from CEO compensation for the moment, we’ve identified 1 warning sign for Norwood Financial that you should be aware of before investing.
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. 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. Thank you for reading.