Shareholders Will Probably Hold Off On Increasing Lakeland Bancorp, Inc.'s (NASDAQ:LBAI) CEO Compensation For The Time Being

As many shareholders of Lakeland Bancorp, Inc. (NASDAQ:LBAI) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 19 May 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Lakeland Bancorp

How Does Total Compensation For Tom Shara Compare With Other Companies In The Industry?

According to our data, Lakeland Bancorp, Inc. has a market capitalization of US$908m, and paid its CEO total annual compensation worth US$2.5m over the year to December 2020. We note that's an increase of 22% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$904k.

On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$1.6m. This suggests that Tom Shara is paid more than the median for the industry. Moreover, Tom Shara also holds US$6.0m worth of Lakeland Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$904k	US$829k	37%
Other	US$1.6m	US$1.2m	63%
Total Compensation	US$2.5m	US$2.0m	100%

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. It's interesting to note that Lakeland Bancorp allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Lakeland Bancorp, Inc.'s Growth

Over the past three years, Lakeland Bancorp, Inc. has seen its earnings per share (EPS) grow by 4.9% per year. Its revenue is up 3.9% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Lakeland Bancorp, Inc. Been A Good Investment?

Since shareholders would have lost about 0.4% over three years, some Lakeland Bancorp, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Lakeland Bancorp that investors should look into moving forward.

Switching gears from Lakeland Bancorp, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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