Advertisement

How Is Lake Shore Bancorp's (NASDAQ:LSBK) CEO Compensated?

Dan Reininga has been the CEO of Lake Shore Bancorp, Inc. (NASDAQ:LSBK) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Lake Shore Bancorp

How Does Total Compensation For Dan Reininga Compare With Other Companies In The Industry?

According to our data, Lake Shore Bancorp, Inc. has a market capitalization of US$72m, and paid its CEO total annual compensation worth US$514k over the year to December 2019. Notably, that's an increase of 9.4% over the year before. We note that the salary portion, which stands at US$363.4k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$528k. This suggests that Lake Shore Bancorp remunerates its CEO largely in line with the industry average. Furthermore, Dan Reininga directly owns US$852k worth of shares in the company.

Component

2019

2018

Proportion (2019)

Salary

US$363k

US$335k

71%

Other

US$151k

US$135k

29%

Total Compensation

US$514k

US$470k

100%

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. According to our research, Lake Shore 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.

ceo-compensation
ceo-compensation

A Look at Lake Shore Bancorp, Inc.'s Growth Numbers

Lake Shore Bancorp, Inc.'s earnings per share (EPS) grew 17% per year over the last three years. In the last year, its revenue is up 2.6%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lake Shore Bancorp, Inc. Been A Good Investment?

Since shareholders would have lost about 14% over three years, some Lake Shore 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...

As previously discussed, Dan is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Dan is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Lake Shore Bancorp that investors should think about before committing capital to this stock.

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.

This article by Simply Wall St is general in nature. 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.

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