It's Unlikely That The CEO Of Oak Valley Bancorp (NASDAQ:OVLY) Will See A Huge Pay Rise This Year

As many shareholders of Oak Valley Bancorp (NASDAQ:OVLY) will be aware, they have not made a gain on their investment in the past three years. 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 15 June 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Oak Valley Bancorp

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

Our data indicates that Oak Valley Bancorp has a market capitalization of US$151m, and total annual CEO compensation was reported as US$784k for the year to December 2020. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$370k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$761k. So it looks like Oak Valley Bancorp compensates Chris Courtney in line with the median for the industry. Furthermore, Chris Courtney directly owns US$3.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$370k	US$359k	47%
Other	US$414k	US$410k	53%
Total Compensation	US$784k	US$769k	100%

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. It's interesting to note that Oak Valley Bancorp pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Oak Valley Bancorp's Growth Numbers

Oak Valley Bancorp's earnings per share (EPS) grew 16% per year over the last three years. In the last year, its revenue is up 11%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Oak Valley Bancorp Been A Good Investment?

With a three year total loss of 14% for the shareholders, Oak Valley Bancorp would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Oak Valley Bancorp that investors should look into moving forward.

Switching gears from Oak Valley Bancorp, 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.

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