Stock Analysis

Shareholders May Be A Bit More Conservative With Pathfinder Bancorp, Inc.'s (NASDAQ:PBHC) CEO Compensation For Now

  •  Updated
Source: Shutterstock

As many shareholders of Pathfinder Bancorp, Inc. (NASDAQ:PBHC) 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. These are some of the concerns that shareholders may want to bring up at the next AGM held on 04 June 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Pathfinder Bancorp

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

According to our data, Pathfinder Bancorp, Inc. has a market capitalization of US$67m, and paid its CEO total annual compensation worth US$564k over the year to December 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at US$360.4k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$572k. So it looks like Pathfinder Bancorp compensates Tom Schneider in line with the median for the industry. What's more, Tom Schneider holds US$908k worth of shares in the company in their own name.

Component20202019Proportion (2020)
Salary US$360k US$360k 64%
Other US$204k US$191k 36%
Total CompensationUS$564k US$552k100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. According to our research, Pathfinder Bancorp has allocated a higher percentage of pay to salary in comparison to the wider 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.

NasdaqCM:PBHC CEO Compensation May 29th 2021

A Look at Pathfinder Bancorp, Inc.'s Growth Numbers

Pathfinder Bancorp, Inc.'s earnings per share (EPS) grew 11% per year over the last three years. Its revenue is up 6.8% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Pathfinder Bancorp, Inc. Been A Good Investment?

Since shareholders would have lost about 1.1% over three years, some Pathfinder Bancorp, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Pathfinder Bancorp that investors should be aware of in a dynamic business environment.

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.

When trading Pathfinder Bancorp or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

Valuation is complex, but we're helping make it simple.

Find out whether Pathfinder Bancorp is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis