In 1989 David Payne was appointed CEO of Westamerica Bancorporation (NASDAQ:WABC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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 David Payne's Compensation Compare With Similar Sized Companies?
Our data indicates that Westamerica Bancorporation is worth US$1.6b, and total annual CEO compensation is US$641k. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$371k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.0m.
A first glance this seems like a real positive for shareholders, since David Payne is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Westamerica Bancorporation has changed over time.
Is Westamerica Bancorporation Growing?
Westamerica Bancorporation has increased its earnings per share (EPS) by an average of 5.3% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 2.0%.
I'm not particularly impressed by the revenue growth, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Westamerica Bancorporation Been A Good Investment?
Most shareholders would probably be pleased with Westamerica Bancorporation for providing a total return of 36% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
It appears that Westamerica Bancorporation remunerates its CEO below most similar sized companies.
David Payne is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. Although we could see higher growth, we'd argue the remuneration is modest, based on these observations. So you may want to check if insiders are buying Westamerica Bancorporation shares with their own money (free access).
If you want to buy a stock that is better than Westamerica Bancorporation, this free list of high return, low debt companies is a great place to look.
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