Shareholders May Be More Conservative With Orrstown Financial Services, Inc.'s (NASDAQ:ORRF) CEO Compensation For Now

Key Insights

• Orrstown Financial Services' Annual General Meeting to take place on 30th of April
• Salary of US$709.2k is part of CEO Tom Quinn's total remuneration
• The total compensation is 152% higher than the average for the industry
• Orrstown Financial Services' EPS grew by 11% over the past three years while total shareholder return over the past three years was 20%

Under the guidance of CEO Tom Quinn, Orrstown Financial Services, Inc. (NASDAQ:ORRF) has performed reasonably well recently. As shareholders go into the upcoming AGM on 30th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Orrstown Financial Services

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

Our data indicates that Orrstown Financial Services, Inc. has a market capitalization of US$277m, and total annual CEO compensation was reported as US$2.6m for the year to December 2023. That's just a smallish increase of 4.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$709k.

For comparison, other companies in the American Banks industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.0m. This suggests that Tom Quinn is paid more than the median for the industry. Furthermore, Tom Quinn directly owns US$2.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$709k	US$695k	27%
Other	US$1.9m	US$1.8m	73%
Total Compensation	US$2.6m	US$2.5m	100%

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. Orrstown Financial Services sets aside a smaller share of compensation for salary, in comparison to the overall 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 Orrstown Financial Services, Inc.'s Growth Numbers

Over the past three years, Orrstown Financial Services, Inc. has seen its earnings per share (EPS) grow by 11% per year. Its revenue is up 5.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Orrstown Financial Services, Inc. Been A Good Investment?

Orrstown Financial Services, Inc. has served shareholders reasonably well, with a total return of 20% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Orrstown Financial Services that investors should be aware of in a dynamic business environment.

Important note: Orrstown Financial Services 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.