Why We Think AmeriServ Financial, Inc.'s (NASDAQ:ASRV) CEO Compensation Is Not Excessive At All

CEO Jeff Stopko has done a decent job of delivering relatively good performance at AmeriServ Financial, Inc. (NASDAQ:ASRV) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27 April 2021. We present our case of why we think CEO compensation looks fair.

View 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$67m, and total annual CEO compensation was reported as US$579k for the year to December 2020. We note that's a small decrease of 4.3% on last year. We note that the salary portion, which stands at US$353.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$572k. So it looks like AmeriServ Financial compensates Jeff Stopko in line with the median for the industry. Moreover, Jeff Stopko also holds US$320k worth of AmeriServ Financial stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	US$353k	US$342k	61%
Other	US$226k	US$263k	39%
Total Compensation	US$579k	US$605k	100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. AmeriServ Financial pays out 61% 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.

A Look at AmeriServ Financial, Inc.'s Growth Numbers

AmeriServ Financial, Inc. has seen its earnings per share (EPS) increase by 10.0% a year over the past three years. Its revenue is up 1.7% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has AmeriServ Financial, Inc. Been A Good Investment?

AmeriServ Financial, Inc. has generated a total shareholder return of 5.9% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for AmeriServ Financial that investors should think about before committing capital to this stock.

Switching gears from AmeriServ Financial, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.
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