Walt Bettinger has been the CEO of The Charles Schwab Corporation (NYSE:SCHW) since 2008. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. 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.
How Does Walt Bettinger's Compensation Compare With Similar Sized Companies?
Our data indicates that The Charles Schwab Corporation is worth US$44b, and total annual CEO compensation was reported as US$16m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. 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 looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$12m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 11% of total compensation out of all the companies we analysed, while other remuneration made up 89% of the pie. So it seems like there isn't a significant difference between Charles Schwab and the broader market, in terms of salary allocation in the overall compensation package.
It would therefore appear that The Charles Schwab Corporation pays Walt Bettinger more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Charles Schwab has changed from year to year.
Is The Charles Schwab Corporation Growing?
The Charles Schwab Corporation has seen earnings per share (EPS) move positively by an average of 26% a year, over the last three years (using a line of best fit). Its revenue is up 5.8% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has The Charles Schwab Corporation Been A Good Investment?
Given the total loss of 13% over three years, many shareholders in The Charles Schwab Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount The Charles Schwab Corporation pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Looking into other areas, we've picked out 1 warning sign for Charles Schwab that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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