In 2012 Marty Plourd was appointed CEO of Community West Bancshares (NASDAQ:CWBC). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Marty Plourd's Compensation Compare With Similar Sized Companies?
According to our data, Community West Bancshares has a market capitalization of US$83m, and paid its CEO total annual compensation worth US$716k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$392k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$492k.
As you can see, Marty Plourd is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Community West Bancshares is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Community West Bancshares, below.
Is Community West Bancshares Growing?
Community West Bancshares has increased its earnings per share (EPS) by an average of 8.4% a year, over the last three years (using a line of best fit). Revenue was pretty flat on last year.
I'm not particularly impressed by the revenue growth, but I'm happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Community West Bancshares Been A Good Investment?
Community West Bancshares has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by Community West Bancshares, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Community West Bancshares (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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