The performance at Codorus Valley Bancorp, Inc. (NASDAQ:CVLY) has been rather lacklustre of late and shareholders may be wondering what CEO Larry Miller is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 18 May 2021. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
Comparing Codorus Valley Bancorp, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Codorus Valley Bancorp, Inc. has a market capitalization of US$183m, and reported total annual CEO compensation of US$473k for the year to December 2020. Notably, that's a decrease of 16% over the year before. In particular, the salary of US$375.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$761k. In other words, Codorus Valley Bancorp pays its CEO lower than the industry median. What's more, Larry Miller holds US$2.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
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. Codorus Valley Bancorp pays out 79% of remuneration in the form of a salary, significantly higher than the industry average. 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.
Codorus Valley Bancorp, Inc.'s Growth
Codorus Valley Bancorp, Inc.'s earnings per share (EPS) grew 6.5% per year over the last three years. In the last year, its revenue is up 5.9%.
We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Codorus Valley Bancorp, Inc. Been A Good Investment?
Since shareholders would have lost about 24% over three years, some Codorus Valley Bancorp, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
The fact that shareholders are sitting on a loss is certainly disheartening. Perhaps the poor price performance may have something to do with the the fact that earnings per share growth has not been performing as strongly either. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Codorus Valley Bancorp that you should be aware of before investing.
Important note: Codorus Valley Bancorp 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.
If you decide to trade Codorus Valley Bancorp, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.