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Is Oak Valley Bancorp’s (NASDAQ:OVLY) CEO Salary Justified?

In 2013 Chris Courtney was appointed CEO of Oak Valley Bancorp (NASDAQ:OVLY). 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.

Check out our latest analysis for Oak Valley Bancorp

How Does Chris Courtney’s Compensation Compare With Similar Sized Companies?

Our data indicates that Oak Valley Bancorp is worth US$153m, and total annual CEO compensation is US$627k. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$335k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO compensation was US$955k.

Most shareholders would consider it a positive that Chris Courtney takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see, below, how CEO compensation at Oak Valley Bancorp has changed over time.

NasdaqCM:OVLY CEO Compensation December 12th 18

Is Oak Valley Bancorp Growing?

Oak Valley Bancorp has increased its earnings per share (EPS) by an average of 24% a year, over the last three years Its revenue is up 9.8% over last year.

This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.

We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Oak Valley Bancorp Been A Good Investment?

I think that the total shareholder return of 91%, over three years, would leave most Oak Valley Bancorp shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.

In Summary…

It appears that Oak Valley Bancorp remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Chris Courtney deserves a raise!

It’s not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Oak Valley Bancorp (free visualization of insider trades).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.