Shareholders Will Most Likely Find Peoples Bancorp Inc.'s (NASDAQ:PEBO) CEO Compensation Acceptable

Despite Peoples Bancorp Inc.'s (NASDAQ:PEBO) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 22 April 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Peoples Bancorp

How Does Total Compensation For Chuck Sulerzyski Compare With Other Companies In The Industry?

At the time of writing, our data shows that Peoples Bancorp Inc. has a market capitalization of US$673m, and reported total annual CEO compensation of US$1.2m for the year to December 2020. That's a slight decrease of 5.6% on the prior year. We note that the salary of US$625.0k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$1.5m. This suggests that Peoples Bancorp remunerates its CEO largely in line with the industry average. What's more, Chuck Sulerzyski holds US$2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$625k	US$600k	51%
Other	US$602k	US$700k	49%
Total Compensation	US$1.2m	US$1.3m	100%

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. Peoples Bancorp pays out 51% 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.

Peoples Bancorp Inc.'s Growth

Over the last three years, Peoples Bancorp Inc. has shrunk its earnings per share by 6.3% per year. In the last year, its revenue is down 13%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Peoples Bancorp Inc. Been A Good Investment?

Peoples Bancorp Inc. has not done too badly by shareholders, with a total return of 6.6%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Whatever your view on compensation, you might want to check if insiders are buying or selling Peoples Bancorp shares (free trial).

Switching gears from Peoples 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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