Increases to CEO Compensation Might Be Put On Hold For Now at Peapack-Gladstone Financial Corporation (NASDAQ:PGC)

Key Insights

• Peapack-Gladstone Financial will host its Annual General Meeting on 30th of April
• Total pay for CEO Doug Kennedy includes US$823.0k salary
• The overall pay is 110% above the industry average
• Peapack-Gladstone Financial's EPS grew by 26% over the past three years while total shareholder loss over the past three years was 18%

In the past three years, the share price of Peapack-Gladstone Financial Corporation (NASDAQ:PGC) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Peapack-Gladstone Financial

Comparing Peapack-Gladstone Financial Corporation's CEO Compensation With The Industry

Our data indicates that Peapack-Gladstone Financial Corporation has a market capitalization of US$438m, and total annual CEO compensation was reported as US$3.0m for the year to December 2023. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$823k.

In comparison with other companies in the American Banks industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.4m. Hence, we can conclude that Doug Kennedy is remunerated higher than the industry median. What's more, Doug Kennedy holds US$2.4m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$823k	US$731k	27%
Other	US$2.2m	US$2.3m	73%
Total Compensation	US$3.0m	US$3.1m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. Peapack-Gladstone Financial 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 Peapack-Gladstone Financial Corporation's Growth Numbers

Peapack-Gladstone Financial Corporation's earnings per share (EPS) grew 26% per year over the last three years. Its revenue is down 8.7% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Peapack-Gladstone Financial Corporation Been A Good Investment?

Since shareholders would have lost about 18% over three years, some Peapack-Gladstone Financial Corporation investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Peapack-Gladstone Financial 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.

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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.