Yahoo Finance Should Shareholders Have Second Thoughts About A Pay Rise For Premier Financial Corp.'s (NASDAQ:PFC) CEO This Year?
Key Insights
Premier Financial to hold its Annual General Meeting on 30th of April
Total pay for CEO Gary Small includes US$617.1k salary
Total compensation is 42% below industry average
Premier Financial's three-year loss to shareholders was 26% while its EPS was down 3.0% over the past three years
Performance at Premier Financial Corp. (NASDAQ:PFC) has not been particularly rosy recently and shareholders will likely be holding CEO Gary Small and the board accountable for this. The next AGM coming up on 30th of April will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.
Check out our latest analysis for Premier Financial
How Does Total Compensation For Gary Small Compare With Other Companies In The Industry?
Our data indicates that Premier Financial Corp. has a market capitalization of US$737m, and total annual CEO compensation was reported as US$1.1m for the year to December 2023. We note that's a small decrease of 4.8% on last year. We note that the salary of US$617.1k makes up a sizeable portion of the total compensation received by the CEO.
On examining similar-sized companies in the American Banks industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$1.9m. This suggests that Gary Small is paid below the industry median. Moreover, Gary Small also holds US$1.7m worth of Premier Financial stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$617k | US$590k | 56% |
Other | US$491k | US$574k | 44% |
Total Compensation | US$1.1m | US$1.2m | 100% |
On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. Premier Financial pays out 56% 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.
Premier Financial Corp.'s Growth
Over the last three years, Premier Financial Corp. has shrunk its earnings per share by 3.0% per year. Its revenue is up 6.4% over the last year.
The lack of EPS growth is certainly uninspiring. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Premier Financial Corp. Been A Good Investment?
Since shareholders would have lost about 26% over three years, some Premier Financial Corp. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
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 Premier Financial that investors should be aware of in a dynamic business environment.
Switching gears from Premier Financial, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
