It's Unlikely That Penns Woods Bancorp, Inc.'s (NASDAQ:PWOD) CEO Will See A Huge Pay Rise This Year

As many shareholders of Penns Woods Bancorp, Inc. (NASDAQ:PWOD) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 27 April 2021. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Penns Woods Bancorp

Comparing Penns Woods Bancorp, Inc.'s CEO Compensation With the industry

Our data indicates that Penns Woods Bancorp, Inc. has a market capitalization of US$166m, and total annual CEO compensation was reported as US$1.5m for the year to December 2020. Notably, that's an increase of 11% over the year before. In particular, the salary of US$995.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$772k. This suggests that Dick Grafmyre is paid more than the median for the industry. Moreover, Dick Grafmyre also holds US$184k worth of Penns Woods Bancorp stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	US$995k	US$825k	67%
Other	US$495k	US$513k	33%
Total Compensation	US$1.5m	US$1.3m	100%

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. According to our research, Penns Woods 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.

Penns Woods Bancorp, Inc.'s Growth

Penns Woods Bancorp, Inc. has seen its earnings per share (EPS) increase by 16% a year over the past three years. In the last year, its revenue changed by just 0.3%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Penns Woods Bancorp, Inc. Been A Good Investment?

With a three year total loss of 9.5% for the shareholders, Penns Woods Bancorp, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. 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.

Shareholders may want to check for free if Penns Woods Bancorp insiders are buying or selling shares.

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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