Lew Critelli became the CEO of Norwood Financial Corp. (NASDAQ:NWFL) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Norwood Financial.
Comparing Norwood Financial Corp.'s CEO Compensation With the industry
Our data indicates that Norwood Financial Corp. has a market capitalization of US$220m, and total annual CEO compensation was reported as US$640k for the year to December 2019. That's a notable increase of 10% on last year. In particular, the salary of US$370.0k, 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$861k. From this we gather that Lew Critelli is paid around the median for CEOs in the industry. What's more, Lew Critelli holds US$1.6m 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 43% of total compensation represents salary and 57% is other remuneration. Norwood Financial pays out 58% of remuneration in the form of a salary, significantly higher than the industry average. 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 Norwood Financial Corp.'s Growth Numbers
Norwood Financial Corp. has seen its earnings per share (EPS) increase by 5.3% a year over the past three years. Its revenue is up 9.2% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, 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 Norwood Financial Corp. Been A Good Investment?
Norwood Financial Corp. has not done too badly by shareholders, with a total return of 3.3%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As previously discussed, Lew is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS and shareholder returns have been stable over the last three years, but have not grown substantially. Considering the steady performance, it's tough to call out CEO compensation as too high, but shareholders might want to see more robust growth metrics before agreeing to a future raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Norwood Financial that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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