Adobe Acrobat's "Signature" function makes absolutely no sense to me. Whether I add a signature as a monotone black-and-white 30 KB GIF with 1/4 the pixels or a 300 KB gray-scale PNG, the PDF's size still increases over 300KB while maintaining the same image quality (Input resolution). The images I am using are square, but I have noticed that increasing the width seems to trigger some sort of compression, which makes the small GIF signature blurry and low-quality, while reducing the total file size by as much as 150 KB (which still produces a ridiculously large file, as the image itself is 30 KB).
I have been testing different methods for quite a while now, and the only way I have found that will insert monochrome signatures without an insanely large file size is to place them in the Word document before conversion to PDF, as the monochrome images (for some reason) are immune to Adobe's bizarre image distortion upon conversion.
However, the above method does not work for files which are not in the Word file to begin with (example: scanned PDFs). Knowing the method Adobe uses to sign documents with images should clear this up. How does Adobe's signature function work?!?
I am using Adobe Reader XI. I do not have access to any third party programs or Adobe's editors.
Sharing the PDF is always a good idea when asking PDF related questions as long as you can share it (it helps us by allowing us to look at the PDF and see what is included in it and what is taking up that space).
Signatures in a PDF will most likely always increase the file size because the PDF may keep multiple versions of the PDF so that when there are multiple signatures reviewers can view the different versions of the document. This takes up space and could be one of the contributing factors to why the document grows in size when signed.
As for the issue related to including an image and how Adobe is handling that when signing the PDF it is hard to say and it sounds like there is a level at which no compression is applied to the image being used ("if smaller than X then don't worry about compressing"). If you supply the image being used and the PDF those with PDF knowledge and time might be able to help diagnose what is going on.