Increases to Bankwell Financial Group, Inc.'s (NASDAQ:BWFG) CEO Compensation Might Cool off for now

Key Insights

• Bankwell Financial Group to hold its Annual General Meeting on 29th of May
• Salary of US$630.0k is part of CEO Chris Gruseke's total remuneration
• The total compensation is 40% higher than the average for the industry
• Over the past three years, Bankwell Financial Group's EPS grew by 43% and over the past three years, the total loss to shareholders 5.7%

In the past three years, the share price of Bankwell Financial Group, Inc. (NASDAQ:BWFG) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 29th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Bankwell Financial Group

How Does Total Compensation For Chris Gruseke Compare With Other Companies In The Industry?

Our data indicates that Bankwell Financial Group, Inc. has a market capitalization of US$185m, and total annual CEO compensation was reported as US$1.5m for the year to December 2023. That's a slight decrease of 7.3% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$630k.

For comparison, other companies in the American Banks industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.0m. This suggests that Chris Gruseke is paid more than the median for the industry. Moreover, Chris Gruseke also holds US$4.9m worth of Bankwell Financial Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$630k	US$600k	43%
Other	US$832k	US$978k	57%
Total Compensation	US$1.5m	US$1.6m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. Our data reveals that Bankwell Financial Group allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Bankwell Financial Group, Inc.'s Growth Numbers

Over the past three years, Bankwell Financial Group, Inc. has seen its earnings per share (EPS) grow by 43% per year. In the last year, its revenue is down 7.9%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Bankwell Financial Group, Inc. Been A Good Investment?

Given the total shareholder loss of 5.7% over three years, many shareholders in Bankwell Financial Group, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Bankwell Financial Group (1 is significant!) that you should be aware of before investing here.

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.