We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Willamette Valley Vineyards, Inc.'s (NASDAQ:WVVI) CEO For Now

Despite strong share price growth of 69% for Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 10 July 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Willamette Valley Vineyards

How Does Total Compensation For Jim Bernau Compare With Other Companies In The Industry?

According to our data, Willamette Valley Vineyards, Inc. has a market capitalization of US$69m, and paid its CEO total annual compensation worth US$606k over the year to December 2020. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$277k.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$345k. Accordingly, our analysis reveals that Willamette Valley Vineyards, Inc. pays Jim Bernau north of the industry median. Furthermore, Jim Bernau directly owns US$5.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$277k	US$272k	46%
Other	US$330k	US$342k	54%
Total Compensation	US$606k	US$614k	100%

Talking in terms of the industry, salary represented approximately 27% of total compensation out of all the companies we analyzed, while other remuneration made up 73% of the pie. Willamette Valley Vineyards is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Willamette Valley Vineyards, Inc.'s Growth

Over the last three years, Willamette Valley Vineyards, Inc. has shrunk its earnings per share by 11% per year. In the last year, its revenue is up 1.1%.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Willamette Valley Vineyards, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Willamette Valley Vineyards, Inc. for providing a total return of 69% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Willamette Valley Vineyards (1 can't be ignored!) that you should be aware of before investing here.

Switching gears from Willamette Valley Vineyards, 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.

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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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