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In 2014 David Trautman was appointed CEO of Park National Corporation (NYSEMKT:PRK). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does David Trautman's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Park National Corporation has a market cap of US$1.2b, and reported total annual CEO compensation of US$2.1m for the year to December 2019. We note that's an increase of 17% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$785k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.6m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Our data reveals that Park National allocates salary in line with the wider market.
Most shareholders would consider it a positive that David Trautman takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see, below, how CEO compensation at Park National has changed over time.
Is Park National Corporation Growing?
Park National Corporation has seen earnings per share (EPS) move positively by an average of 6.6% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 8.7%.
I would argue that the improvement in revenue isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has Park National Corporation Been A Good Investment?
Since shareholders would have lost about 19% over three years, some Park National Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like Park National Corporation pays its CEO less than similar sized companies.
David Trautman is paid less than CEOs of similar size companies, but growth hasn't been particularly impressive and the total shareholder return over three years would leave many disappointed. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. Looking into other areas, we've picked out 2 warning signs for Park National that investors should think about before committing capital to this stock.
Important note: Park National 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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