Ames National Corporation's (NASDAQ:ATLO) CEO Will Probably Struggle To See A Pay Rise This Year

Key Insights

• Ames National's Annual General Meeting to take place on 30th of April
• Total pay for CEO John Nelson includes US$393.9k salary
• Total compensation is 58% below industry average
• Ames National's three-year loss to shareholders was 15% while its EPS was down 20% over the past three years

The underwhelming performance at Ames National Corporation (NASDAQ:ATLO) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 30th of April. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Ames National

Comparing Ames National Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Ames National Corporation has a market capitalization of US$156m, and reported total annual CEO compensation of US$420k for the year to December 2024. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at US$393.9k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the American Banks industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.0m. In other words, Ames National pays its CEO lower than the industry median. Moreover, John Nelson also holds US$322k worth of Ames National stock directly under their own name.

On an industry level, roughly 44% of total compensation represents salary and 56% is other remuneration. It's interesting to note that Ames National pays out a greater portion of remuneration through salary, compared to the industry. 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 Ames National Corporation's Growth Numbers

Ames National Corporation has reduced its earnings per share by 20% a year over the last three years. In the last year, its revenue is up 6.8%.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Ames National Corporation Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in Ames National Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in Ames National we think you should know about.

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.