Shareholders May Find It Hard To Justify Increasing Plumas Bancorp's (NASDAQ:PLBC) CEO Compensation For Now

In the past three years, the share price of Plumas Bancorp (NASDAQ:PLBC) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 19 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Plumas Bancorp

How Does Total Compensation For Andy Ryback Compare With Other Companies In The Industry?

At the time of writing, our data shows that Plumas Bancorp has a market capitalization of US$144m, and reported total annual CEO compensation of US$438k for the year to December 2020. We note that's a decrease of 22% compared to last year. Notably, the salary which is US$347.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$573k. This suggests that Plumas Bancorp remunerates its CEO largely in line with the industry average. Furthermore, Andy Ryback directly owns US$1.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$347k	US$335k	79%
Other	US$91k	US$225k	21%
Total Compensation	US$438k	US$560k	100%

On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. Plumas Bancorp is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Plumas Bancorp's Growth

Plumas Bancorp's earnings per share (EPS) grew 17% per year over the last three years. In the last year, its revenue is up 3.4%.

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 Plumas Bancorp Been A Good Investment?

With a three year total loss of 1.5% for the shareholders, Plumas Bancorp would certainly have some dissatisfied shareholders. 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 be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Plumas 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.

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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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