Craig Best became the CEO of Peoples Financial Services Corp. (NASDAQ:PFIS) in 2013, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Peoples Financial Services Corp.'s CEO Compensation With the industry
At the time of writing, our data shows that Peoples Financial Services Corp. has a market capitalization of US$268m, and reported total annual CEO compensation of US$820k for the year to December 2019. Notably, that's a decrease of 10% over the year before. We note that the salary portion, which stands at US$439.5k constitutes the majority of total compensation received by 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$805k. From this we gather that Craig Best is paid around the median for CEOs in the industry. Moreover, Craig Best also holds US$927k worth of Peoples Financial Services stock directly under their own name.
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Peoples Financial Services pays out 54% of remuneration in the form of a salary, significantly higher than the industry average. 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.
Peoples Financial Services Corp.'s Growth
Over the past three years, Peoples Financial Services Corp. has seen its earnings per share (EPS) grow by 8.7% per year. Its revenue is down 1.2% over the previous year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Peoples Financial Services Corp. Been A Good Investment?
Since shareholders would have lost about 12% over three years, some Peoples Financial Services Corp. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, Peoples Financial Services Corp. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Peoples Financial Services that investors should look into moving forward.
Switching gears from Peoples Financial Services, 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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