Yahoo Finance We Think Washington Trust Bancorp, Inc.'s (NASDAQ:WASH) CEO Compensation Package Needs To Be Put Under A Microscope
Key Insights
Washington Trust Bancorp to hold its Annual General Meeting on 23rd of April
Salary of US$749.2k is part of CEO Ned Handy's total remuneration
The overall pay is comparable to the industry average
Washington Trust Bancorp's EPS declined by 11% over the past three years while total shareholder loss over the past three years was 42%
The results at Washington Trust Bancorp, Inc. (NASDAQ:WASH) have been quite disappointing recently and CEO Ned Handy bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 23rd of April. 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 Washington Trust Bancorp
Comparing Washington Trust Bancorp, Inc.'s CEO Compensation With The Industry
According to our data, Washington Trust Bancorp, Inc. has a market capitalization of US$418m, and paid its CEO total annual compensation worth US$1.5m over the year to December 2023. That's a notable decrease of 22% on last year. Notably, the salary which is US$749.2k, represents a considerable chunk of the total compensation being paid.
On examining similar-sized companies in the American Banks industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.4m. This suggests that Washington Trust Bancorp remunerates its CEO largely in line with the industry average. What's more, Ned Handy holds US$1.1m worth of shares in the company in their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$749k | US$709k | 51% |
Other | US$728k | US$1.2m | 49% |
Total Compensation | US$1.5m | US$1.9m | 100% |
Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. It's interesting to note that Washington Trust Bancorp pays out a greater portion of remuneration through salary, compared to the 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.
Washington Trust Bancorp, Inc.'s Growth
Over the last three years, Washington Trust Bancorp, Inc. has shrunk its earnings per share by 11% per year. It saw its revenue drop 14% over the last year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Washington Trust Bancorp, Inc. Been A Good Investment?
The return of -42% over three years would not have pleased Washington Trust Bancorp, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
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, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Washington Trust Bancorp that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
