Shareholders quiz Heritage Financial CEO at annual meeting

The annual shareholders meeting of a publicly traded company means investors get to ask questions of management, and that was the case Wednesday during the shareholders meeting for Heritage Financial Corp., the parent company of Olympia’s Heritage Bank.

Several questions were posed to President and Chief Executive Brian Vance during the hourlong presentation about the company, including data about the company’s most recent quarter. Heritage netted an almost $10 million profit in the first quarter.

But some shareholders in the audience at the Heritage Room in downtown Olympia on Wednesday want to see an even bigger return on their investment.

Tom Pasquier of Edgewood, Pierce County, asked why shareholder return at Heritage Financial hasn’t matched that of its peers, or similarly sized banks.

That is due to the company’s recent acquisition activity — and the cost of such deals — which has “subdued the normal operations of the company,” Vance said, adding that Heritage Financial’s performance in the first quarter should be a reflection of how it performs in the future.

That’s because Heritage’s merger with Washington Banking Co., the parent company of Whidbey Island Bank, is complete and those expenses now are out of the way.

Pasquier also asked about the recent rise in executive compensation, while another voice in the audience asked about Heritage’s growth plans.

Vance acknowledged that compensation has gone up, but the size of the company also has doubled, he said.

Compensation is in line with a peer group of about 20 West Coast banks, Vance said, adding that they aim to pay at the median level of that group, but generally pay below it.

In 2014 — the most recent year of compensation data — Vance earned a base salary of about $487,000, up 18 percent from 2013, according to an SEC filing.

As for growth, the company, for the moment, has hit the pause button on another merger and acquisition, he said, but such deals aren’t completely off the table.

“It has to make sense to us and we have to be able to manage the risk,” Vance said.

Heritage Financial’s 14-member board of directors also were re-elected Wednesday. Among the newest board members is Ann Watson, chief financial officer of Moss Adams LLP of Seattle.