Charles Holland became the CEO of Veritex Holdings, Inc. (NASDAQ:VBTX) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Charles Holland's Compensation Compare With Similar Sized Companies?
According to our data, Veritex Holdings, Inc. has a market capitalization of US$1.4b, and pays its CEO total annual compensation worth US$1.0m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$460k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.9m.
A first glance this seems like a real positive for shareholders, since Charles Holland 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.
The graphic below shows how CEO compensation at Veritex Holdings has changed from year to year.
Is Veritex Holdings, Inc. Growing?
Veritex Holdings, Inc. has increased its earnings per share (EPS) by an average of 10% a year, over the last three years (using a line of best fit). Its revenue is up 99% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Veritex Holdings, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Veritex Holdings, Inc. for providing a total return of 50% over three years. 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 appears that Veritex Holdings, Inc. remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Charles Holland deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Veritex Holdings shares (free trial).
If you want to buy a stock that is better than Veritex Holdings, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.