Here's Why Shareholders May Want To Be Cautious With Increasing Greene County Bancorp, Inc.'s (NASDAQ:GCBC) CEO Pay Packet

Key Insights

• Greene County Bancorp's Annual General Meeting to take place on 2nd of November
• CEO Don Gibson's total compensation includes salary of US$650.0k
• The total compensation is 71% higher than the average for the industry
• Greene County Bancorp's EPS declined by 2.1% over the past three years while total shareholder return over the past three years was 72%

Despite strong share price growth of 72% for Greene County Bancorp, Inc. (NASDAQ:GCBC) 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 2nd of November. 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 Greene County Bancorp

Comparing Greene County Bancorp, Inc.'s CEO Compensation With The Industry

According to our data, Greene County Bancorp, Inc. has a market capitalization of US$480m, and paid its CEO total annual compensation worth US$2.2m over the year to June 2024. We note that's an increase of 12% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$650k.

For comparison, other companies in the American Banks industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.3m. Accordingly, our analysis reveals that Greene County Bancorp, Inc. pays Don Gibson north of the industry median. What's more, Don Gibson holds US$4.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$650k	US$608k	29%
Other	US$1.6m	US$1.4m	71%
Total Compensation	US$2.2m	US$2.0m	100%

Talking in terms of the industry, salary represented approximately 44% of total compensation out of all the companies we analyzed, while other remuneration made up 56% of the pie. In Greene County Bancorp's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Greene County Bancorp, Inc.'s Growth Numbers

Over the last three years, Greene County Bancorp, Inc. has shrunk its earnings per share by 2.1% per year. In the last year, its revenue is down 10%.

A lack of EPS improvement is not good to see. 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. 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 Greene County Bancorp, Inc. Been A Good Investment?

Boasting a total shareholder return of 72% over three years, Greene County Bancorp, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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

Important note: Greene County 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.