Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up 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?

Our data indicates that Willamette Valley Vineyards, Inc. has a market capitalization of US$69m, and total annual CEO compensation was reported as US$606k for the year to December 2020. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued 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. This suggests that Jim Bernau is paid more than the median for the industry. Moreover, Jim Bernau also holds US$5.4m worth of Willamette Valley Vineyards stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 27% of total compensation represents salary, while the remainder of 73% is other remuneration. Willamette Valley Vineyards pays out 46% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Willamette Valley Vineyards, Inc.'s Growth

Willamette Valley Vineyards, Inc. has reduced its earnings per share by 11% a year over the last three years. Its revenue is up 1.1% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

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

We think that the total shareholder return of 69%, over three years, would leave most Willamette Valley Vineyards, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

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. That's why we did our research, and identified 4 warning signs for Willamette Valley Vineyards (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Important note: Willamette Valley Vineyards is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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