We Discuss Why AmeriServ Financial, Inc.'s (NASDAQ:ASRV) CEO Compensation May Be Closely Reviewed

Key Insights

• AmeriServ Financial to hold its Annual General Meeting on 20th of August
• CEO Jeff Stopko's total compensation includes salary of US$390.8k
• Total compensation is similar to the industry average
• AmeriServ Financial's three-year loss to shareholders was 33% while its EPS was down 63% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at AmeriServ Financial, Inc. (NASDAQ:ASRV) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20th of August. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for AmeriServ Financial

How Does Total Compensation For Jeff Stopko Compare With Other Companies In The Industry?

Our data indicates that AmeriServ Financial, Inc. has a market capitalization of US$38m, and total annual CEO compensation was reported as US$561k for the year to December 2023. We note that's an increase of 41% above last year. Notably, the salary which is US$390.8k, represents most of the total compensation being paid.

In comparison with other companies in the American Banks industry with market capitalizations under US$200m, the reported median total CEO compensation was US$642k. This suggests that AmeriServ Financial remunerates its CEO largely in line with the industry average. What's more, Jeff Stopko holds US$326k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$391k	US$377k	70%
Other	US$171k	US$21k	30%
Total Compensation	US$561k	US$399k	100%

Talking in terms of the industry, salary represented approximately 44% of total compensation out of all the companies we analyzed, while other remuneration made up 56% of the pie. AmeriServ Financial is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

AmeriServ Financial, Inc.'s Growth

Over the last three years, AmeriServ Financial, Inc. has shrunk its earnings per share by 63% per year. In the last year, its revenue is down 18%.

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. 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 AmeriServ Financial, Inc. Been A Good Investment?

Few AmeriServ Financial, Inc. shareholders would feel satisfied with the return of -33% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for AmeriServ Financial you should be aware of, and 1 of them is significant.

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.