Yahoo Finance We Discuss Why Walker & Dunlop, Inc.'s (NYSE:WD) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year
Key Insights
Walker & Dunlop will host its Annual General Meeting on 2nd of May
Total pay for CEO Willy Walker includes US$1.00m salary
Total compensation is 39% below industry average
Walker & Dunlop's EPS declined by 27% over the past three years while total shareholder loss over the past three years was 12%
The underwhelming performance at Walker & Dunlop, Inc. (NYSE:WD) recently has probably not pleased shareholders. The next AGM coming up on 2nd of May will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. The data we gathered below shows that CEO compensation looks acceptable for now.
Check out 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$3.1b, and paid its CEO total annual compensation worth US$4.8m over the year to December 2023. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the American Diversified Financial industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$7.9m. In other words, Walker & Dunlop pays its CEO lower than the industry median. Furthermore, Willy Walker directly owns US$84m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.0m | US$1.0m | 21% |
Other | US$3.8m | US$3.8m | 79% |
Total Compensation | US$4.8m | US$4.8m | 100% |
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Walker & Dunlop pays out 21% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Walker & Dunlop, Inc.'s Growth Numbers
Over the last three years, Walker & Dunlop, Inc. has shrunk its earnings per share by 27% per year. It saw its revenue drop 19% over the last year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Walker & Dunlop, Inc. Been A Good Investment?
With a three year total loss of 12% for the shareholders, Walker & Dunlop, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
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 is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 1 which doesn't sit too well with us) in Walker & Dunlop we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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.
