Here's Why It's Unlikely That Umpqua Holdings Corporation's (NASDAQ:UMPQ) CEO Will See A Pay Rise This Year

Umpqua Holdings Corporation (NASDAQ:UMPQ) has not performed well recently and CEO Cort O’Haver will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20 April 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Umpqua Holdings

Comparing Umpqua Holdings Corporation's CEO Compensation With the industry

According to our data, Umpqua Holdings Corporation has a market capitalization of US$4.0b, and paid its CEO total annual compensation worth US$4.3m over the year to December 2020. We note that's an increase of 20% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$3.4m. From this we gather that Cort O’Haver is paid around the median for CEOs in the industry. What's more, Cort O’Haver holds US$10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$1.0m	US$950k	23%
Other	US$3.3m	US$2.7m	77%
Total Compensation	US$4.3m	US$3.6m	100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. Umpqua Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Umpqua Holdings Corporation's Growth

Umpqua Holdings Corporation has reduced its earnings per share by 104% a year over the last three years. It saw its revenue drop 8.2% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Umpqua Holdings Corporation Been A Good Investment?

Since shareholders would have lost about 2.6% over three years, some Umpqua Holdings Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Umpqua Holdings that investors should look into moving forward.

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. 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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