Here's Why Generations Bancorp NY, Inc.'s (NASDAQ:GBNY) CEO Compensation Is The Least Of Shareholders Concerns

Performance at Generations Bancorp NY, Inc. (NASDAQ:GBNY) has been rather uninspiring recently and shareholders may be wondering how CEO Menzo Case plans to fix this. At the next AGM coming up on 20 May 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

Check out our latest analysis for Generations Bancorp NY

Comparing Generations Bancorp NY, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Generations Bancorp NY, Inc. has a market capitalization of US$24m, and reported total annual CEO compensation of US$334k for the year to December 2020. That's a modest increase of 7.6% on the prior year. Notably, the salary which is US$277.1k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$535k. Accordingly, Generations Bancorp NY pays its CEO under the industry median. Furthermore, Menzo Case directly owns US$739k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	US$277k	US$263k	83%
Other	US$57k	US$47k	17%
Total Compensation	US$334k	US$310k	100%

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. Generations Bancorp NY is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Generations Bancorp NY, Inc.'s Growth Numbers

Generations Bancorp NY, Inc. has seen its earnings per share (EPS) increase by 32% a year over the past three years. In the last year, its revenue is up 9.3%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Generations Bancorp NY, Inc. Been A Good Investment?

With a three year total loss of 14% for the shareholders, Generations Bancorp NY, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The uninspiring share price returns contrasts with the strong EPS growth, suggesting that there may be other factors at play causing it to diverge from fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Generations Bancorp NY that you should be aware of before investing.

Important note: Generations Bancorp NY 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. 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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