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Bill Foster became the CEO of Village Bank and Trust Financial Corp. (NASDAQ:VBFC) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Bill Foster's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Village Bank and Trust Financial Corp. has a market cap of US$48m, and is paying total annual CEO compensation of US$498k. (This is based on the year to December 2018). That's a notable increase of 25% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$294k. 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$453k.
So Bill Foster 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 Village Bank and Trust Financial has changed over time.
Is Village Bank and Trust Financial Corp. Growing?
Village Bank and Trust Financial Corp. has reduced its earnings per share by an average of 51% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 13%.
Sadly for shareholders, earnings per share are actually down, over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Village Bank and Trust Financial Corp. Been A Good Investment?
Boasting a total shareholder return of 41% over three years, Village Bank and Trust Financial Corp. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Bill Foster is paid around the same as most CEOs of similar size companies.
The company isn't growing earnings per share, but shareholder returns have been strong over the last three years. So we can't see a reason to suggest the pay is inappropriate. So you may want to check if insiders are buying Village Bank and Trust Financial shares with their own money (free access).
Important note: Village Bank and Trust Financial may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 email@example.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.