Stock Analysis

Here's Why WVS Financial Corp.'s (NASDAQ:WVFC) CEO Compensation Is The Least Of Shareholders' Concerns

OTCPK:WVFC
Source: Shutterstock

The share price of WVS Financial Corp. (NASDAQ:WVFC) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 26 October 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for WVS Financial

Comparing WVS Financial Corp.'s CEO Compensation With the industry

Our data indicates that WVS Financial Corp. has a market capitalization of US$27m, and total annual CEO compensation was reported as US$587k for the year to June 2021. That's a fairly small increase of 7.2% over the previous year. We note that the salary portion, which stands at US$425.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$534k. So it looks like WVS Financial compensates Dave Bursic in line with the median for the industry. Furthermore, Dave Bursic directly owns US$3.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20212020Proportion (2021)
Salary US$425k US$400k 72%
Other US$162k US$148k 28%
Total CompensationUS$587k US$548k100%

Talking in terms of the industry, salary represented approximately 51% of total compensation out of all the companies we analyzed, while other remuneration made up 49% of the pie. It's interesting to note that WVS Financial pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
NasdaqGM:WVFC CEO Compensation October 20th 2021

A Look at WVS Financial Corp.'s Growth Numbers

Over the last three years, WVS Financial Corp. has shrunk its earnings per share by 14% per year. In the last year, its revenue is down 22%.

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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has WVS Financial Corp. Been A Good Investment?

With a total shareholder return of 18% over three years, WVS Financial Corp. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for WVS Financial that investors should think about before committing capital to this stock.

Switching gears from WVS Financial, 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.

Valuation is complex, but we're here to simplify it.

Discover if WVS Financial might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

Access Free Analysis

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.