We Discuss Why Fidelity D & D Bancorp, Inc.'s (NASDAQ:FDBC) CEO Compensation May Be Closely Reviewed

Key Insights

• Fidelity D & D Bancorp to hold its Annual General Meeting on 7th of May
• Total pay for CEO Dan Santaniello includes US$460.1k salary
• Total compensation is similar to the industry average
• Fidelity D & D Bancorp's three-year loss to shareholders was 12% while its EPS was down 4.9% over the past three years

Fidelity D & D Bancorp, Inc. (NASDAQ:FDBC) has not performed well recently and CEO Dan Santaniello will probably need to up their game. At the upcoming AGM on 7th of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Fidelity D & D Bancorp

Comparing Fidelity D & D Bancorp, Inc.'s CEO Compensation With The Industry

According to our data, Fidelity D & D Bancorp, Inc. has a market capitalization of US$260m, and paid its CEO total annual compensation worth US$865k over the year to December 2023. That's a notable decrease of 12% on last year. In particular, the salary of US$460.1k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the American Banks industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.1m. So it looks like Fidelity D & D Bancorp compensates Dan Santaniello in line with the median for the industry. What's more, Dan Santaniello 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.

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. Fidelity D & D Bancorp is paying a higher share of its remuneration through a salary in comparison to the overall 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.

Fidelity D & D Bancorp, Inc.'s Growth

Over the last three years, Fidelity D & D Bancorp, Inc. has shrunk its earnings per share by 4.9% per year. It saw its revenue drop 18% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Fidelity D & D Bancorp, Inc. Been A Good Investment?

Given the total shareholder loss of 12% over three years, many shareholders in Fidelity D & D Bancorp, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business 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 2 warning signs for Fidelity D & D Bancorp that investors should think about before committing capital to this stock.

Important note: Fidelity D & D 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.

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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.