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Is Provident Financial Holdings, Inc.'s (NASDAQ:PROV) CEO Paid Enough Relative To Peers?

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In 1996 Craig Blunden was appointed CEO of Provident Financial Holdings, Inc. (NASDAQ:PROV). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Provident Financial Holdings

How Does Craig Blunden's Compensation Compare With Similar Sized Companies?

According to our data, Provident Financial Holdings, Inc. has a market capitalization of US$151m, and paid its CEO total annual compensation worth US$522k over the year to June 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$493k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.2m.

A first glance this seems like a real positive for shareholders, since Craig Blunden is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Provident Financial Holdings has changed from year to year.

NasdaqGS:PROV CEO Compensation, October 17th 2019
NasdaqGS:PROV CEO Compensation, October 17th 2019

Is Provident Financial Holdings, Inc. Growing?

On average over the last three years, Provident Financial Holdings, Inc. has shrunk earnings per share by 15% each year (measured with a line of best fit). Its revenue is down 13% over last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Provident Financial Holdings, Inc. Been A Good Investment?

Provident Financial Holdings, Inc. has served shareholders reasonably well, with a total return of 12% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

It appears that Provident Financial Holdings, Inc. remunerates its CEO below most similar sized companies.

The compensation paid to Craig Blunden is lower than is usual at similar sized companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. There is room for improved company performance, but we don't see the CEO pay as a big issue here. So you may want to check if insiders are buying Provident Financial Holdings shares with their own money (free access).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.