Yahoo Finance We Think Shareholders May Want To Consider A Review Of Financial Institutions, Inc.'s (NASDAQ:FISI) CEO Compensation Package
Key Insights
Financial Institutions to hold its Annual General Meeting on 5th of June
CEO Marty Birmingham's total compensation includes salary of US$713.9k
The total compensation is 40% higher than the average for the industry
Financial Institutions' EPS declined by 11% over the past three years while total shareholder loss over the past three years was 37%
Financial Institutions, Inc. (NASDAQ:FISI) has not performed well recently and CEO Marty Birmingham will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 5th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
See our latest analysis for Financial Institutions
How Does Total Compensation For Marty Birmingham Compare With Other Companies In The Industry?
According to our data, Financial Institutions, Inc. has a market capitalization of US$274m, and paid its CEO total annual compensation worth US$1.5m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$714k.
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. Hence, we can conclude that Marty Birmingham is remunerated higher than the industry median. Furthermore, Marty Birmingham directly owns US$2.5m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$714k | US$692k | 48% |
Other | US$759k | US$799k | 52% |
Total Compensation | US$1.5m | US$1.5m | 100% |
On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. There isn't a significant difference between Financial Institutions and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Financial Institutions, Inc.'s Growth Numbers
Over the last three years, Financial Institutions, Inc. has shrunk its earnings per share by 11% per year. It achieved revenue growth of 3.9% over the last year.
Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Financial Institutions, Inc. Been A Good Investment?
With a total shareholder return of -37% over three years, Financial Institutions, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
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.
So you may want to check if insiders are buying Financial Institutions shares with their own money (free access).
Switching gears from Financial Institutions, 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.
