Why We Think Western Pacific Trust Company's (CVE:WP) CEO Compensation Is Not Excessive At All

Key Insights

• Western Pacific Trust will host its Annual General Meeting on 28th of May
• Salary of CA$171.1k is part of CEO Alison Alfer's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Western Pacific Trust's EPS fell by 25% and over the past three years, the total shareholder return was 71%

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The share price of Western Pacific Trust Company (CVE:WP) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. Some of these issues will occupy shareholders' minds as the AGM rolls around on 28th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Western Pacific Trust

How Does Total Compensation For Alison Alfer Compare With Other Companies In The Industry?

According to our data, Western Pacific Trust Company has a market capitalization of CA$5.5m, and paid its CEO total annual compensation worth CA$178k over the year to December 2024. That's a modest increase of 5.1% on the prior year. We note that the salary portion, which stands at CA$171.1k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Canadian Capital Markets industry with market capitalizations under CA$278m, the reported median total CEO compensation was CA$177k. From this we gather that Alison Alfer is paid around the median for CEOs in the industry. Furthermore, Alison Alfer directly owns CA$130k worth of shares in the company.

Component	2024	2023	Proportion (2024)
Salary	CA$171k	CA$162k	96%
Other	CA$6.9k	CA$7.0k	4%
Total Compensation	CA$178k	CA$169k	100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Western Pacific Trust is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Western Pacific Trust Company's Growth

Western Pacific Trust Company has reduced its earnings per share by 25% a year over the last three years. Its revenue is up 5.4% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Western Pacific Trust Company Been A Good Investment?

Boasting a total shareholder return of 71% over three years, Western Pacific Trust Company has done well by shareholders. 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.

To Conclude...

Alison receives almost all of their compensation through a salary. While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Western Pacific Trust (of which 2 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.