The underwhelming share price performance of Provident Financial Holdings, Inc. (NASDAQ:PROV) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 29 November 2022. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Comparing Provident Financial Holdings, Inc.'s CEO Compensation With The Industry
Our data indicates that Provident Financial Holdings, Inc. has a market capitalization of US$104m, and total annual CEO compensation was reported as US$562k for the year to June 2022. This means that the compensation hasn't changed much from last year. Notably, the salary which is US$529.8k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$562k. So it looks like Provident Financial Holdings compensates Craig Blunden in line with the median for the industry. Furthermore, Craig Blunden directly owns US$3.3m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Provident Financial Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.
Provident Financial Holdings, Inc.'s Growth
Provident Financial Holdings, Inc.'s earnings per share (EPS) grew 20% per year over the last three years. It achieved revenue growth of 9.0% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Provident Financial Holdings, Inc. Been A Good Investment?
With a three year total loss of 26% for the shareholders, Provident Financial Holdings, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Provident Financial Holdings (free visualization of insider trades).
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.
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