Here's Why It's Unlikely That Fidelity D & D Bancorp, Inc.'s (NASDAQ:FDBC) CEO Will See A Pay Rise This Year
Key Insights
Fidelity D & D Bancorp will host its Annual General Meeting on 7th of May
Total pay for CEO Dan Santaniello includes US$460.1k salary
Total compensation is similar to the industry average
Fidelity D & D Bancorp's three-year loss to shareholders was 12% while its EPS was down 4.9% over the past three years
Shareholders will probably not be too impressed with the underwhelming results at Fidelity D & D Bancorp, Inc. (NASDAQ:FDBC) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of May. 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. We present the case why we think CEO compensation is out of sync with company performance.
See our latest analysis for Fidelity D & D Bancorp
Comparing Fidelity D & D Bancorp, Inc.'s CEO Compensation With The Industry
Our data indicates that Fidelity D & D Bancorp, Inc. has a market capitalization of US$260m, and total annual CEO compensation was reported as US$865k for the year to December 2023. We note that's a decrease of 12% compared to last year. In particular, the salary of US$460.1k, makes up a fairly large portion of the total compensation being paid to the CEO.
On examining similar-sized companies in the American Banks industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.1m. This suggests that Fidelity D & D Bancorp remunerates its CEO largely in line with the industry average. Moreover, Dan Santaniello also holds US$2.6m worth of Fidelity D & D Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$460k | US$424k | 53% |
Other | US$405k | US$555k | 47% |
Total Compensation | US$865k | US$979k | 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. According to our research, Fidelity D & D Bancorp has allocated a higher percentage of pay to salary in comparison to the wider 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.
Fidelity D & D Bancorp, Inc.'s Growth
Over the last three years, Fidelity D & D Bancorp, Inc. has shrunk its earnings per share by 4.9% per year. It saw its revenue drop 18% over the last year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Fidelity D & D Bancorp, Inc. Been A Good Investment?
Since shareholders would have lost about 12% over three years, some Fidelity D & D Bancorp, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Fidelity D & D Bancorp that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
