Key Insights

• Washington Trust Bancorp to hold its Annual General Meeting on 23rd of April
• Total pay for CEO Ned Handy includes US$749.2k salary
• The overall pay is comparable to the industry average
• Washington Trust Bancorp's three-year loss to shareholders was 42% while its EPS was down 11% over the past three years

Washington Trust Bancorp, Inc. (NASDAQ:WASH) has not performed well recently and CEO Ned Handy will probably need to up their game. At the upcoming AGM on 23rd of April, shareholders can hear from the board including their plans for turning around performance. 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.

Comparing Washington Trust Bancorp, Inc.'s CEO Compensation With The Industry

Our data indicates that Washington Trust Bancorp, Inc. has a market capitalization of US$418m, and total annual CEO compensation was reported as US$1.5m for the year to December 2023. We note that's a decrease of 22% compared to last year. We note that the salary of US$749.2k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the American Banks industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.4m. This suggests that Washington Trust Bancorp remunerates its CEO largely in line with the industry average. Moreover, Ned Handy also holds US$1.1m worth of Washington Trust Bancorp stock directly under their own name.

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Washington Trust Bancorp pays out 51% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Washington Trust Bancorp, Inc.'s Growth Numbers

Over the last three years, Washington Trust Bancorp, Inc. has shrunk its earnings per share by 11% per year. Its revenue is down 14% over the previous year.

Few shareholders would be pleased to read that EPS have declined. 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. 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 Washington Trust Bancorp, Inc. Been A Good Investment?

With a total shareholder return of -42% over three years, Washington Trust Bancorp, Inc. shareholders would by and large be disappointed. 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.

Important note: Washington Trust 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.