Shareholders May Be More Conservative With Chemung Financial Corporation's (NASDAQ:CHMG) CEO Compensation For Now

Key Insights

• Chemung Financial to hold its Annual General Meeting on 3rd of June
• CEO Anders Tomson's total compensation includes salary of US$710.4k
• The total compensation is 36% higher than the average for the industry
• Chemung Financial's total shareholder return over the past three years was 17% while its EPS was down 6.1% over the past three years

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Despite positive share price growth of 17% for Chemung Financial Corporation (NASDAQ:CHMG) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 3rd of June. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Chemung Financial

Comparing Chemung Financial Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Chemung Financial Corporation has a market capitalization of US$224m, and reported total annual CEO compensation of US$1.4m for the year to December 2024. That's a fairly small increase of 6.3% over the previous year. We note that the salary of US$710.4k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the American Banks industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.0m. Hence, we can conclude that Anders Tomson is remunerated higher than the industry median. Moreover, Anders Tomson also holds US$2.8m worth of Chemung Financial stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Chemung Financial 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.

Chemung Financial Corporation's Growth

Over the last three years, Chemung Financial Corporation has shrunk its earnings per share by 6.1% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Chemung Financial Corporation Been A Good Investment?

With a total shareholder return of 17% over three years, Chemung Financial Corporation 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...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Chemung Financial.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.