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Chris Courtney became the CEO of Oak Valley Bancorp (NASDAQ:OVLY) in 2013, 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 Oak Valley Bancorp pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Oak Valley Bancorp's CEO Compensation With the industry
Our data indicates that Oak Valley Bancorp has a market capitalization of US$140m, and total annual CEO compensation was reported as US$769k for the year to December 2019. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$359k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$626k. From this we gather that Chris Courtney is paid around the median for CEOs in the industry. What's more, Chris Courtney holds US$3.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
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. There isn't a significant difference between Oak Valley Bancorp and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Oak Valley Bancorp's Growth Numbers
Oak Valley Bancorp has seen its earnings per share (EPS) increase by 7.4% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.
We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Oak Valley Bancorp Been A Good Investment?
Since shareholders would have lost about 2.4% over three years, some Oak Valley Bancorp investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Oak Valley Bancorp pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, Oak Valley Bancorp is suffering from adverse shareholder returns and althoughEPS have grown over the past three years, they have not been extraordinary. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Oak Valley Bancorp that you should be aware of before investing.
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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