Most Shareholders Will Probably Find That The CEO Compensation For United Security Bancshares (NASDAQ:UBFO) Is Reasonable

Key Insights

• United Security Bancshares' Annual General Meeting to take place on 21st of May
• Salary of US$727.4k is part of CEO Dennis Woods's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, United Security Bancshares' EPS grew by 5.2% and over the past three years, the total shareholder return was 48%

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CEO Dennis Woods has done a decent job of delivering relatively good performance at United Security Bancshares (NASDAQ:UBFO) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21st of May. We present our case of why we think CEO compensation looks fair.

View our latest analysis for United Security Bancshares

Comparing United Security Bancshares' CEO Compensation With The Industry

At the time of writing, our data shows that United Security Bancshares has a market capitalization of US$159m, and reported total annual CEO compensation of US$1.1m for the year to December 2024. That's a notable increase of 21% on last year. We note that the salary portion, which stands at US$727.4k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the American Banks industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$980k. So it looks like United Security Bancshares compensates Dennis Woods in line with the median for the industry. Furthermore, Dennis Woods directly owns US$11m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 44% of total compensation represents salary, while the remainder of 56% is other remuneration. United Security Bancshares is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at United Security Bancshares' Growth Numbers

United Security Bancshares has seen its earnings per share (EPS) increase by 5.2% a year over the past three years. Its revenue is down 7.4% over the previous year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 United Security Bancshares Been A Good Investment?

Boasting a total shareholder return of 48% over three years, United Security Bancshares 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

Whatever your view on compensation, you might want to check if insiders are buying or selling United Security Bancshares shares (free trial).

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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.