Stock Analysis

It's Probably Less Likely That Canadian Western Bank's (TSE:CWB) CEO Will See A Huge Pay Rise This Year

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Key Insights

  • Canadian Western Bank to hold its Annual General Meeting on 4th of April
  • Total pay for CEO Chris Fowler includes CA$820.0k salary
  • Total compensation is similar to the industry average
  • Canadian Western Bank's three-year loss to shareholders was 0.3% while its EPS grew by 3.8% over the past three years

In the past three years, the share price of Canadian Western Bank (TSE:CWB) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 4th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Canadian Western Bank

How Does Total Compensation For Chris Fowler Compare With Other Companies In The Industry?

At the time of writing, our data shows that Canadian Western Bank has a market capitalization of CA$2.7b, and reported total annual CEO compensation of CA$3.1m for the year to October 2023. That's just a smallish increase of 7.5% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$820k.

For comparison, other companies in the Canadian Banks industry with market capitalizations ranging between CA$1.4b and CA$4.3b had a median total CEO compensation of CA$3.8m. This suggests that Canadian Western Bank remunerates its CEO largely in line with the industry average. Moreover, Chris Fowler also holds CA$4.7m worth of Canadian Western Bank stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20232022Proportion (2023)
Salary CA$820k CA$815k 27%
Other CA$2.3m CA$2.1m 73%
Total CompensationCA$3.1m CA$2.9m100%

Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. It's interesting to note that Canadian Western Bank pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

TSX:CWB CEO Compensation March 29th 2024

Canadian Western Bank's Growth

Canadian Western Bank has seen its earnings per share (EPS) increase by 3.8% a year over the past three years. In the last year, its revenue is up 2.1%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Canadian Western Bank Been A Good Investment?

Given the total shareholder loss of 0.3% over three years, many shareholders in Canadian Western Bank are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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 be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Canadian Western Bank (free visualization of insider trades).

Switching gears from Canadian Western Bank, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Valuation is complex, but we're helping make it simple.

Find out whether Canadian Western Bank is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.