We Think Old Point Financial Corporation's (NASDAQ:OPOF) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Old Point Financial's Annual General Meeting to take place on 28th of May
• Salary of US$425.5k is part of CEO Rob Shuford's total remuneration
• The total compensation is similar to the average for the industry
• Old Point Financial's three-year loss to shareholders was 30% while its EPS was down 2.9% over the past three years

Old Point Financial Corporation (NASDAQ:OPOF) has not performed well recently and CEO Rob Shuford will probably need to up their game. At the upcoming AGM on 28th of May, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Old Point Financial

Comparing Old Point Financial Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Old Point Financial Corporation has a market capitalization of US$76m, and reported total annual CEO compensation of US$587k for the year to December 2023. That's slightly lower by 3.1% over the previous year. Notably, the salary which is US$425.5k, represents most of the total compensation being paid.

In comparison with other companies in the American Banks industry with market capitalizations under US$200m, the reported median total CEO compensation was US$639k. This suggests that Old Point Financial remunerates its CEO largely in line with the industry average. Furthermore, Rob Shuford directly owns US$3.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$426k	US$397k	72%
Other	US$162k	US$209k	28%
Total Compensation	US$587k	US$606k	100%

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. It's interesting to note that Old Point Financial pays out a greater portion of remuneration through salary, compared to the 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.

A Look at Old Point Financial Corporation's Growth Numbers

Over the last three years, Old Point Financial Corporation has shrunk its earnings per share by 2.9% per year. It saw its revenue drop 1.3% over the last year.

A lack of EPS improvement is not good to see. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Old Point Financial Corporation Been A Good Investment?

Few Old Point Financial Corporation shareholders would feel satisfied with the return of -30% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 2 warning signs for Old Point Financial that investors should think about before committing capital to this stock.

Switching gears from Old Point Financial, 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. 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.