Stock Analysis

Shareholders May Be More Conservative With Community Bank System, Inc.'s (NYSE:CBU) CEO Compensation For Now

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Under the guidance of CEO Mark Tryniski, Community Bank System, Inc. (NYSE:CBU) has performed reasonably well recently. As shareholders go into the upcoming AGM on 13 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Community Bank System

Comparing Community Bank System, Inc.'s CEO Compensation With the industry

According to our data, Community Bank System, Inc. has a market capitalization of US$4.3b, and paid its CEO total annual compensation worth US$5.2m over the year to December 2020. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$845k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$3.4m. This suggests that Mark Tryniski is paid more than the median for the industry. Moreover, Mark Tryniski also holds US$14m worth of Community Bank System stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$845k US$824k 16%
Other US$4.3m US$4.3m 84%
Total CompensationUS$5.2m US$5.2m100%

Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. Community Bank System pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NYSE:CBU CEO Compensation May 7th 2021

Community Bank System, Inc.'s Growth

Over the last three years, Community Bank System, Inc. has not seen its earnings per share change much, though there is a slight positive movement. In the last year, its revenue is up 2.2%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Community Bank System, Inc. Been A Good Investment?

We think that the total shareholder return of 46%, over three years, would leave most Community Bank System, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which is concerning) in Community Bank System we think you should know about.

Important note: Community Bank System 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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