Stock Analysis

Here's Why Shareholders May Want To Be Cautious With Increasing Walker & Dunlop, Inc.'s (NYSE:WD) CEO Pay Packet

  •  Updated
NYSE:WD
Source: Shutterstock

CEO Willy Walker has done a decent job of delivering relatively good performance at Walker & Dunlop, Inc. (NYSE:WD) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 06 May 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Walker & Dunlop

How Does Total Compensation For Willy Walker Compare With Other Companies In The Industry?

According to our data, Walker & Dunlop, Inc. has a market capitalization of US$3.4b, and paid its CEO total annual compensation worth US$7.0m over the year to December 2020. That's a notable increase of 43% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$900k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.2m. This suggests that Willy Walker is paid more than the median for the industry. Moreover, Willy Walker also holds US$181m worth of Walker & Dunlop stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$900k US$900k 13%
Other US$6.1m US$4.0m 87%
Total CompensationUS$7.0m US$4.9m100%

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. Walker & Dunlop pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NYSE:WD CEO Compensation May 1st 2021

A Look at Walker & Dunlop, Inc.'s Growth Numbers

Walker & Dunlop, Inc.'s earnings per share (EPS) grew 5.3% per year over the last three years. Its revenue is up 30% over the last year.

It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Walker & Dunlop, Inc. Been A Good Investment?

Boasting a total shareholder return of 116% over three years, Walker & Dunlop, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Walker & Dunlop you should be aware of, and 1 of them doesn't sit too well with us.

Important note: Walker & Dunlop is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

If you’re looking to trade Walker & Dunlop, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


Valuation is complex, but we're helping make it simple.

Find out whether Walker & Dunlop is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis