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How Is Cullen/Frost Bankers' (NYSE:CFR) CEO Compensated?

Simply Wall St
·4 mins read

This article will reflect on the compensation paid to Phil Green who has served as CEO of Cullen/Frost Bankers, Inc. (NYSE:CFR) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cullen/Frost Bankers.

Check out our latest analysis for Cullen/Frost Bankers

How Does Total Compensation For Phil Green Compare With Other Companies In The Industry?

At the time of writing, our data shows that Cullen/Frost Bankers, Inc. has a market capitalization of US$4.7b, and reported total annual CEO compensation of US$4.8m for the year to December 2019. That's just a smallish increase of 3.2% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$4.8m. From this we gather that Phil Green is paid around the median for CEOs in the industry. Furthermore, Phil Green directly owns US$8.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$1.0m

US$990k

21%

Other

US$3.8m

US$3.6m

79%

Total Compensation

US$4.8m

US$4.6m

100%

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. It's interesting to note that Cullen/Frost Bankers 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

A Look at Cullen/Frost Bankers, Inc.'s Growth Numbers

Over the past three years, Cullen/Frost Bankers, Inc. has seen its earnings per share (EPS) grow by 4.4% per year. Its revenue is down 1.1% over the previous year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Cullen/Frost Bankers, Inc. Been A Good Investment?

Given the total shareholder loss of 13% over three years, many shareholders in Cullen/Frost Bankers, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Cullen/Frost Bankers pays its CEO in line with similar-sized companies belonging to the same industry. But with negative shareholder returns and unimpressive earnings growth, shareholders will surely be disturbed. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Phil deserves a raise.

So you may want to check if insiders are buying Cullen/Frost Bankers shares with their own money (free access).

Important note: Cullen/Frost Bankers 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@simplywallst.com.