Key Insights

• Associated Banc-Corp to hold its Annual General Meeting on 30th of April

• Total pay for CEO Andy Harmening includes US$1.03m salary

• The total compensation is similar to the average for the industry

• Associated Banc-Corp's total shareholder return over the past three years was 10% while its EPS was down 15% over the past three years

Despite positive share price growth of 10% for Associated Banc-Corp (NYSE:ASB) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 30th of April. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Associated Banc-Corp

Comparing Associated Banc-Corp's CEO Compensation With The Industry

According to our data, Associated Banc-Corp has a market capitalization of US$3.1b, and paid its CEO total annual compensation worth US$4.7m over the year to December 2023. Notably, that's a decrease of 22% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

For comparison, other companies in the American Banks industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$4.6m. From this we gather that Andy Harmening is paid around the median for CEOs in the industry. What's more, Andy Harmening holds US$4.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. Associated Banc-Corp sets aside a smaller share of compensation for salary, in comparison to the overall 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 Associated Banc-Corp's Growth Numbers

Associated Banc-Corp has reduced its earnings per share by 15% a year over the last three years. Its revenue is down 15% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Associated Banc-Corp Been A Good Investment?

With a total shareholder return of 10% over three years, Associated Banc-Corp shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Associated Banc-Corp that investors should be aware of in a dynamic business environment.

Important note: Associated Banc-Corp 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.