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In 1989 David Payne was appointed CEO of Westamerica Bancorporation (NASDAQ:WABC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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.
How Does David Payne’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Westamerica Bancorporation has a market cap of US$1.7b, and is paying total annual CEO compensation of US$615k. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$371k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.4m.
Most shareholders would consider it a positive that David Payne 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 a visual representation of the CEO compensation at Westamerica Bancorporation, below.
Is Westamerica Bancorporation Growing?
Over the last three years Westamerica Bancorporation has shrunk its earnings per share by an average of 1.1% per year (measured with a line of best fit). It achieved revenue growth of 3.6% over the last year.
The lack of earnings per share growth in the last three years is unimpressive. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Westamerica Bancorporation Been A Good Investment?
Most shareholders would probably be pleased with Westamerica Bancorporation for providing a total return of 51% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It looks like Westamerica Bancorporation pays its CEO less than similar sized companies.
David Payne is paid less than CEOs of similar size companies. While the company isn’t growing on our analysis, shareholder returns have been good in recent years. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. So you may want to check if insiders are buying Westamerica Bancorporation shares with their own money (free access).
Important note: Westamerica Bancorporation may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 firstname.lastname@example.org. 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. On rare occasion, data errors may occur. Thank you for reading.