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Here's What We Learned About The CEO Pay At NBT Bancorp Inc. (NASDAQ:NBTB)

Simply Wall St
·3-min read

John Watt has been the CEO of NBT Bancorp Inc. (NASDAQ:NBTB) since 2016, 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.

View our latest analysis for NBT Bancorp

How Does Total Compensation For John Watt Compare With Other Companies In The Industry?

Our data indicates that NBT Bancorp Inc. has a market capitalization of US$1.3b, and total annual CEO compensation was reported as US$2.4m for the year to December 2019. We note that's an increase of 10% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$761k.

In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$2.9m. So it looks like NBT Bancorp compensates John Watt in line with the median for the industry. What's more, John Watt holds US$2.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$761k

US$725k

32%

Other

US$1.6m

US$1.4m

68%

Total Compensation

US$2.4m

US$2.2m

100%

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. NBT Bancorp sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

NBT Bancorp Inc.'s Growth

NBT Bancorp Inc. has seen its earnings per share (EPS) increase by 5.6% a year over the past three years. Its revenue is down 3.9% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 NBT Bancorp Inc. Been A Good Investment?

Given the total shareholder loss of 16% over three years, many shareholders in NBT Bancorp Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, NBT Bancorp Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.

So you may want to check if insiders are buying NBT Bancorp shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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.