We Think Shareholders May Want To Consider A Review Of Western New England Bancorp, Inc.'s (NASDAQ:WNEB) CEO Compensation Package

Key Insights

• Western New England Bancorp will host its Annual General Meeting on 9th of May
• Salary of US$701.3k is part of CEO Jim Hagan's total remuneration
• The overall pay is 120% above the industry average
• Over the past three years, Western New England Bancorp's EPS fell by 0.5% and over the past three years, the total loss to shareholders 16%

The results at Western New England Bancorp, Inc. (NASDAQ:WNEB) have been quite disappointing recently and CEO Jim Hagan bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 9th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Western New England Bancorp

How Does Total Compensation For Jim Hagan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Western New England Bancorp, Inc. has a market capitalization of US$134m, and reported total annual CEO compensation of US$1.4m for the year to December 2023. That's a fairly small increase of 6.9% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$701k.

On comparing similar-sized companies in the American Banks industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$643k. Accordingly, our analysis reveals that Western New England Bancorp, Inc. pays Jim Hagan north of the industry median. What's more, Jim Hagan holds US$1.9m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$701k	US$641k	50%
Other	US$715k	US$684k	50%
Total Compensation	US$1.4m	US$1.3m	100%

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. It's interesting to note that Western New England Bancorp pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Western New England Bancorp, Inc.'s Growth Numbers

Over the last three years, Western New England Bancorp, Inc. has not seen its earnings per share change much, though they have deteriorated slightly. Its revenue is down 16% over the previous year.

Its a bit disappointing to see that the company has failed to grow its EPS. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Western New England Bancorp, Inc. Been A Good Investment?

Given the total shareholder loss of 16% over three years, many shareholders in Western New England Bancorp, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Western New England Bancorp that investors should look into moving forward.

Important note: Western New England Bancorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.