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Brent Beardall became the CEO of Washington Federal, Inc. (NASDAQ:WAFD) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Washington Federal pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Washington Federal, Inc.'s CEO Compensation With the industry
According to our data, Washington Federal, Inc. has a market capitalization of US$1.9b, and paid its CEO total annual compensation worth US$2.3m over the year to September 2019. We note that's a small decrease of 3.2% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$675k.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$4.1m. This suggests that Brent Beardall is paid below the industry median. Furthermore, Brent Beardall directly owns US$7.1m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. In Washington Federal's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Washington Federal, Inc.'s Growth
Over the past three years, Washington Federal, Inc. has seen its earnings per share (EPS) grow by 12% per year. In the last year, its revenue is up 8.1%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Washington Federal, Inc. Been A Good Investment?
With a three year total loss of 21% for the shareholders, Washington Federal, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Washington Federal, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the earnings per share growth over three years is certainly impressive. Considering earnings are on the up, we would say Brent is compensated fairly. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Washington Federal that investors should be aware of in a dynamic business environment.
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.
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