A Look At Central Valley Community Bancorp's (NASDAQ:CVCY) CEO Remuneration
Jim Ford became the CEO of Central Valley Community Bancorp (NASDAQ:CVCY) in 2015, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Central Valley Community Bancorp.
See our latest analysis for Central Valley Community Bancorp
How Does Total Compensation For Jim Ford Compare With Other Companies In The Industry?
According to our data, Central Valley Community Bancorp has a market capitalization of US$186m, and paid its CEO total annual compensation worth US$676k over the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of US$348.2k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$811k. So it looks like Central Valley Community Bancorp compensates Jim Ford in line with the median for the industry. Moreover, Jim Ford also holds US$713k worth of Central Valley Community Bancorp stock directly under their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$348k | US$336k | 51% |
Other | US$328k | US$322k | 49% |
Total Compensation | US$676k | US$659k | 100% |
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. Central Valley Community Bancorp pays out 51% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Central Valley Community Bancorp's Growth
Central Valley Community Bancorp has seen its earnings per share (EPS) increase by 1.6% a year over the past three years. In the last year, its revenue is down 9.0%.
We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Central Valley Community Bancorp Been A Good Investment?
Given the total shareholder loss of 19% over three years, many shareholders in Central Valley Community Bancorp are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we touched on above, Central Valley Community Bancorp is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Central Valley Community Bancorp you should be aware of, and 1 of them is a bit concerning.
Important note: Central Valley Community Bancorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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