Yahoo Finance Does Heritage Financial Corporation’s (NASDAQ:HFWA) CEO Salary Reflect Performance?
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Brian Vance became the CEO of Heritage Financial Corporation (NASDAQ:HFWA) in 2006. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Heritage Financial
How Does Brian Vance’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Heritage Financial Corporation has a market cap of US$1.1b, and is paying total annual CEO compensation of US$1.3m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$525k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO compensation was US$2.2m.
Most shareholders would consider it a positive that Brian Vance takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Heritage Financial has changed from year to year.
Is Heritage Financial Corporation Growing?
On average over the last three years, Heritage Financial Corporation has grown earnings per share (EPS) by 5.1% each year (using a line of best fit). It achieved revenue growth of 25% over the last year.
I like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn’t shabby. I wouldn’t say this is necessarily top notch growth, but it is certainly promising.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Heritage Financial Corporation Been A Good Investment?
Boasting a total shareholder return of 96% over three years, Heritage Financial Corporation has done well by shareholders. 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.
In Summary…
Heritage Financial Corporation is currently paying its CEO below what is normal for companies of its size.
Brian Vance is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. Although we could see higher growth, we’d argue the remuneration is modest, based on these observations. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Heritage Financial (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
