Shareholders May Be A Bit More Conservative With Central Valley Community Bancorp's (NASDAQ:CVCY) CEO Compensation For Now

As many shareholders of Central Valley Community Bancorp (NASDAQ:CVCY) 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. These are some of the concerns that shareholders may want to bring up at the next AGM held on 19 May 2021. 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 Central Valley Community Bancorp

Comparing Central Valley Community Bancorp's CEO Compensation With the industry

Our data indicates that Central Valley Community Bancorp has a market capitalization of US$233m, and total annual CEO compensation was reported as US$631k for the year to December 2020. We note that's a small decrease of 6.6% on last year. Notably, the salary which is US$361.8k, represents a considerable chunk of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$772k. This suggests that Central Valley Community Bancorp remunerates its CEO largely in line with the industry average. Furthermore, Jim Ford directly owns US$1.0m worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	US$362k	US$348k	57%
Other	US$270k	US$328k	43%
Total Compensation	US$631k	US$676k	100%

On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. According to our research, Central Valley Community Bancorp has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Central Valley Community Bancorp's Growth Numbers

Central Valley Community Bancorp has seen its earnings per share (EPS) increase by 13% a year over the past three years. In the last year, its revenue is down 5.0%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Central Valley Community Bancorp Been A Good Investment?

Since shareholders would have lost about 5.9% over three years, some Central Valley Community Bancorp investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Central Valley Community Bancorp (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Central Valley Community Bancorp 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. 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.
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