It's Probably Less Likely That Canadian Western Bank's (TSE:CWB) CEO Will See A Huge Pay Rise This Year
Key Insights
Canadian Western Bank's Annual General Meeting to take place on 4th of April
Salary of CA$820.0k is part of CEO Chris Fowler's total remuneration
Total compensation is similar to the industry average
Canadian Western Bank's EPS grew by 3.8% over the past three years while total shareholder loss over the past three years was 0.3%
As many shareholders of Canadian Western Bank (TSE:CWB) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 4th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Canadian Western Bank
Comparing Canadian Western Bank's CEO Compensation With The Industry
Our data indicates that Canadian Western Bank has a market capitalization of CA$2.7b, and total annual CEO compensation was reported as CA$3.1m for the year to October 2023. That's a modest increase of 7.5% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$820k.
On comparing similar companies from the Canadian Banks industry with market caps ranging from CA$1.4b to CA$4.3b, we found that the median CEO total compensation was CA$3.8m. So it looks like Canadian Western Bank compensates Chris Fowler in line with the median for the industry. What's more, Chris Fowler holds CA$4.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$820k | CA$815k | 27% |
Other | CA$2.3m | CA$2.1m | 73% |
Total Compensation | CA$3.1m | CA$2.9m | 100% |
On an industry level, around 11% of total compensation represents salary and 89% is other remuneration. Canadian Western Bank pays out 27% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Canadian Western Bank's Growth Numbers
Canadian Western Bank's earnings per share (EPS) grew 3.8% per year over the last three years. It achieved revenue growth of 2.1% over the last year.
We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Canadian Western Bank Been A Good Investment?
With a three year total loss of 0.3% for the shareholders, Canadian Western Bank would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
Whatever your view on compensation, you might want to check if insiders are buying or selling Canadian Western Bank shares (free trial).
Important note: Canadian Western Bank 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
