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The Compensation For Pinnacle Financial Partners, Inc.'s (NASDAQ:PNFP) CEO Looks Deserved And Here's Why

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Simply Wall St
·4 min read
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The performance at Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) has been quite strong recently and CEO Michael Turner has played a role in it. Coming up to the next AGM on 20 April 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Pinnacle Financial Partners

How Does Total Compensation For Michael Turner Compare With Other Companies In The Industry?

At the time of writing, our data shows that Pinnacle Financial Partners, Inc. has a market capitalization of US$6.9b, and reported total annual CEO compensation of US$4.4m for the year to December 2020. That's a notable decrease of 11% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$4.8m. So it looks like Pinnacle Financial Partners compensates Michael Turner in line with the median for the industry. What's more, Michael Turner holds US$38m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$1.1m

US$1.0m

24%

Other

US$3.3m

US$3.9m

76%

Total Compensation

US$4.4m

US$4.9m

100%

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. It's interesting to note that Pinnacle Financial Partners allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Pinnacle Financial Partners, Inc.'s Growth

Over the past three years, Pinnacle Financial Partners, Inc. has seen its earnings per share (EPS) grow by 14% per year. Its revenue is down 5.5% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Pinnacle Financial Partners, Inc. Been A Good Investment?

Boasting a total shareholder return of 49% over three years, Pinnacle Financial Partners, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Pinnacle Financial Partners that investors should think about before committing capital to this stock.

Important note: Pinnacle Financial Partners 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.