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Is Canadian Western Bank's (TSE:CWB) CEO Pay Justified?

Simply Wall St

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Chris Fowler has been the CEO of Canadian Western Bank (TSE:CWB) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Canadian Western Bank

How Does Chris Fowler's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Canadian Western Bank has a market cap of CA$2.6b, and is paying total annual CEO compensation of CA$2.8m. (This number is for the twelve months until October 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$755k. When we examined a selection of companies with market caps ranging from CA$1.3b to CA$4.3b, we found the median CEO total compensation was CA$3.1m.

So Chris Fowler is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Canadian Western Bank has changed over time.

TSX:CWB CEO Compensation, May 8th 2019

Is Canadian Western Bank Growing?

Over the last three years Canadian Western Bank has grown its earnings per share (EPS) by an average of 8.1% per year (using a line of best fit). In the last year, its revenue is up 11%.

This revenue growth could really point to a brighter future. And the improvement in earnings per share is modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. It could be important to check this free visual depiction of what analysts expect for the future.

Has Canadian Western Bank Been A Good Investment?

Canadian Western Bank has served shareholders reasonably well, with a total return of 31% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Chris Fowler is paid around the same as most CEOs of similar size companies.

The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. So you may want to check if insiders are buying Canadian Western Bank 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.