Westwood Holdings Group, Inc.'s (NYSE:WHG) CEO Might Not Expect Shareholders To Be So Generous This Year

The results at Westwood Holdings Group, Inc. (NYSE:WHG) have been quite disappointing recently and CEO Brian Casey bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28 April 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Westwood Holdings Group

How Does Total Compensation For Brian Casey Compare With Other Companies In The Industry?

According to our data, Westwood Holdings Group, Inc. has a market capitalization of US$133m, and paid its CEO total annual compensation worth US$750k over the year to December 2020. We note that's an increase of 13% above last year. We note that the salary portion, which stands at US$733.3k 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$365k. Accordingly, our analysis reveals that Westwood Holdings Group, Inc. pays Brian Casey north of the industry median. Furthermore, Brian Casey directly owns US$6.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$733k	US$650k	98%
Other	US$17k	US$17k	2%
Total Compensation	US$750k	US$667k	100%

On an industry level, around 12% of total compensation represents salary and 88% is other remuneration. Westwood Holdings Group has gone down a largely traditional route, paying Brian Casey a high salary, giving it preference over non-salary benefits. 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.

A Look at Westwood Holdings Group, Inc.'s Growth Numbers

Over the last three years, Westwood Holdings Group, Inc. has shrunk its earnings per share by 79% per year. Its revenue is down 22% over the previous 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. 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 Westwood Holdings Group, Inc. Been A Good Investment?

Few Westwood Holdings Group, Inc. shareholders would feel satisfied with the return of -66% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Brian receives almost all of their compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Westwood Holdings Group you should be aware of, and 1 of them shouldn't be ignored.

Important note: Westwood Holdings Group 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.

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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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