Marty Plourd became the CEO of Community West Bancshares (NASDAQ:CWBC) in 2012. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Marty Plourd’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Community West Bancshares has a market cap of US$84m, and is paying total annual CEO compensation of US$716k. (This figure is for the year to December 2018). That’s a notable increase of 9.9% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$392k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$434k.
As you can see, Marty Plourd is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Community West Bancshares is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Community West Bancshares has changed over time.
Is Community West Bancshares Growing?
On average over the last three years, Community West Bancshares has grown earnings per share (EPS) by 20% each year (using a line of best fit). It achieved revenue growth of 3.6% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Community West Bancshares Been A Good Investment?
Most shareholders would probably be pleased with Community West Bancshares for providing a total return of 50% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Community West Bancshares pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Community West Bancshares 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.
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If you spot an error that warrants correction, please contact the editor at email@example.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.