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Does Green Dot Corporation's (NYSE:GDOT) CEO Pay Matter?

Simply Wall St

In 2001 Steve Streit was appointed CEO of Green Dot Corporation (NYSE:GDOT). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

View our latest analysis for Green Dot

How Does Steve Streit's Compensation Compare With Similar Sized Companies?

Our data indicates that Green Dot Corporation is worth US$1.6b, and total annual CEO compensation is US$5.5m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$750k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.

It would therefore appear that Green Dot Corporation pays Steve Streit more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Green Dot, below.

NYSE:GDOT CEO Compensation, September 3rd 2019

Is Green Dot Corporation Growing?

Green Dot Corporation has increased its earnings per share (EPS) by an average of 39% a year, over the last three years (using a line of best fit). Its revenue is up 7.8% over last year.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.

Has Green Dot Corporation Been A Good Investment?

With a total shareholder return of 31% over three years, Green Dot Corporation shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared total CEO remuneration at Green Dot Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Green Dot (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.