Key Insights

• Community West Bancshares will host its Annual General Meeting on 30th of May
• Salary of US$509.6k is part of CEO James Kim's total remuneration
• The overall pay is 32% below the industry average
• Community West Bancshares' three-year loss to shareholders was 13% while its EPS was down 11% over the past three years

Performance at Community West Bancshares (NASDAQ:CWBC) has not been particularly rosy recently and shareholders will likely be holding CEO James Kim and the board accountable for this. At the upcoming AGM on 30th of May, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. The data we gathered below shows that CEO compensation looks acceptable for now.

How Does Total Compensation For James Kim Compare With Other Companies In The Industry?

Our data indicates that Community West Bancshares has a market capitalization of US$325m, and total annual CEO compensation was reported as US$934k for the year to December 2023. That's a notable increase of 8.2% on last year. In particular, the salary of US$509.6k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the American Banks industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.4m. In other words, Community West Bancshares pays its CEO lower than the industry median. Moreover, James Kim also holds US$850k worth of Community West Bancshares stock directly under their own name.

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. Community West Bancshares is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Community West Bancshares' Growth Numbers

Community West Bancshares has reduced its earnings per share by 11% a year over the last three years. Revenue was pretty flat on last year.

The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Community West Bancshares Been A Good Investment?

Since shareholders would have lost about 13% over three years, some Community West Bancshares investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Community West Bancshares (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.