Our View On Auburn National Bancorporation's (NASDAQ:AUBN) CEO Pay

This article will reflect on the compensation paid to Bob Dumas who has served as CEO of Auburn National Bancorporation, Inc. (NASDAQ:AUBN) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Auburn National Bancorporation

How Does Total Compensation For Bob Dumas Compare With Other Companies In The Industry?

At the time of writing, our data shows that Auburn National Bancorporation, Inc. has a market capitalization of US$150m, and reported total annual CEO compensation of US$469k for the year to December 2019. Notably, that's an increase of 11% over the year before. We note that the salary portion, which stands at US$328.5k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$624k. From this we gather that Bob Dumas is paid around the median for CEOs in the industry. Furthermore, Bob Dumas directly owns US$1.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. According to our research, Auburn National Bancorporation has allocated a higher percentage of pay to salary in comparison to the wider 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 Auburn National Bancorporation, Inc.'s Growth Numbers

Over the last three years, Auburn National Bancorporation, Inc. has not seen its earnings per share change much, though there is a slight positive movement. It saw its revenue drop 8.3% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Auburn National Bancorporation, Inc. Been A Good Investment?

With a total shareholder return of 24% over three years, Auburn National Bancorporation, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As previously discussed, Bob is compensated close to the median for companies of its size, and which belong to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. Considering the steady performance, it's tough to call out CEO compensation as too high, but shareholders might want to see more robust growth metrics before agreeing to a future raise.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Auburn National Bancorporation that investors should look into moving forward.

Important note: Auburn National Bancorporation is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
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