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Is Cass Information Systems, Inc.'s (NASDAQ:CASS) CEO Pay Fair?

Simply Wall St
·4 min read

Eric Brunngraber has been the CEO of Cass Information Systems, Inc. (NASDAQ:CASS) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Cass Information Systems

How Does Eric Brunngraber's Compensation Compare With Similar Sized Companies?

Our data indicates that Cass Information Systems, Inc. is worth US$551m, and total annual CEO compensation was reported as US$3.4m for the year to December 2019. Notably, that's an increase of 61% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$663k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$2.3m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 16% of total compensation represents salary and 84% is other remuneration. Our data reveals that Cass Information Systems allocates salary in line with the wider market.

Thus we can conclude that Eric Brunngraber receives more in total compensation than the median of a group of companies in the same market, and of similar size to Cass Information Systems, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see, below, how CEO compensation at Cass Information Systems has changed over time.

NasdaqGS:CASS CEO Compensation May 4th 2020
NasdaqGS:CASS CEO Compensation May 4th 2020

Is Cass Information Systems, Inc. Growing?

Cass Information Systems, Inc. has seen earnings per share (EPS) move positively by an average of 8.5% a year, over the last three years (using a line of best fit). Its revenue is up 4.6% over last year.

I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Cass Information Systems, Inc. Been A Good Investment?

Given the total loss of 20% over three years, many shareholders in Cass Information Systems, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Cass Information Systems, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. So shareholders might not feel great about the fact that CEO pay increased on last year. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Shifting gears from CEO pay for a second, we've picked out 1 warning sign for Cass Information Systems that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.