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Is Cullen/Frost Bankers, Inc. (NYSE:CFR) Overpaying Its CEO?

Simply Wall St

Phil Green became the CEO of Cullen/Frost Bankers, Inc. (NYSE:CFR) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Cullen/Frost Bankers

How Does Phil Green's Compensation Compare With Similar Sized Companies?

According to our data, Cullen/Frost Bankers, Inc. has a market capitalization of US$5.9b, and paid its CEO total annual compensation worth US$4.6m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$990k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.8m.

A first glance this seems like a real positive for shareholders, since Phil Green is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Cullen/Frost Bankers, below.

NYSE:CFR CEO Compensation, November 12th 2019

Is Cullen/Frost Bankers, Inc. Growing?

Cullen/Frost Bankers, Inc. has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). Its revenue is up 6.0% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Cullen/Frost Bankers, Inc. Been A Good Investment?

With a total shareholder return of 21% over three years, Cullen/Frost Bankers, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Cullen/Frost Bankers, Inc. is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn't mean that Phil Green is paid too much. It's good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Cullen/Frost Bankers (free visualization of insider trades).

Important note: Cullen/Frost Bankers may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.