Greg Becker became the CEO of SVB Financial Group (NASDAQ:SIVB) in 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Greg Becker's Compensation Compare With Similar Sized Companies?
Our data indicates that SVB Financial Group is worth US$12b, and total annual CEO compensation was reported as US$7.6m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$954k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
A first glance this seems like a real positive for shareholders, since Greg Becker is paid less than the average total compensation paid by other large companies. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at SVB Financial Group has changed from year to year.
Is SVB Financial Group Growing?
On average over the last three years, SVB Financial Group has grown earnings per share (EPS) by 43% each year (using a line of best fit). In the last year, its revenue is up 29%.
This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.
Has SVB Financial Group Been A Good Investment?
I think that the total shareholder return of 71%, over three years, would leave most SVB Financial Group shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It looks like SVB Financial Group pays its CEO less than the average at large companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Greg Becker deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at SVB Financial Group.
Important note: SVB Financial Group 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.
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