In the past three years, the share price of Union Bankshares, Inc. (NASDAQ:UNB) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 19 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Comparing Union Bankshares, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Union Bankshares, Inc. has a market capitalization of US$150m, and reported total annual CEO compensation of US$734k for the year to December 2020. That's a notable increase of 21% on last year. We note that the salary of US$415.4k 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$100m and US$400m had a median total CEO compensation of US$772k. This suggests that Union Bankshares remunerates its CEO largely in line with the industry average. What's more, David Silverman holds US$831k worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. Union Bankshares pays out 57% 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.
Union Bankshares, Inc.'s Growth
Union Bankshares, Inc.'s earnings per share (EPS) grew 15% per year over the last three years. In the last year, its revenue is up 14%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Union Bankshares, Inc. Been A Good Investment?
With a three year total loss of 27% for the shareholders, Union Bankshares, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
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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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