CNB Financial Corporation's (NASDAQ:CCNE) CEO Compensation Is Looking A Bit Stretched At The Moment

As many shareholders of CNB Financial Corporation (NASDAQ:CCNE) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20 April 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for CNB Financial

How Does Total Compensation For Joe Bower Compare With Other Companies In The Industry?

Our data indicates that CNB Financial Corporation has a market capitalization of US$409m, and total annual CEO compensation was reported as US$1.6m for the year to December 2020. We note that's a small decrease of 3.4% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$623k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.0m. Hence, we can conclude that Joe Bower is remunerated higher than the industry median. What's more, Joe Bower holds US$8.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$623k	US$590k	39%
Other	US$985k	US$1.1m	61%
Total Compensation	US$1.6m	US$1.7m	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. Our data reveals that CNB Financial 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 CNB Financial Corporation's Growth Numbers

CNB Financial Corporation's earnings per share (EPS) grew 7.9% per year over the last three years. Its revenue is up 8.3% over the last year.

We'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 CNB Financial Corporation Been A Good Investment?

Since shareholders would have lost about 7.1% over three years, some CNB Financial Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.

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 CNB Financial that you should be aware of before investing.

Switching gears from CNB 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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