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Does Sterling Bancorp's (NYSE:STL) CEO Salary Compare Well With The Performance Of The Company?

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Simply Wall St
·3 min read
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Jack Kopnisky has been the CEO of Sterling Bancorp (NYSE:STL) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Sterling Bancorp

Comparing Sterling Bancorp's CEO Compensation With the industry

Our data indicates that Sterling Bancorp has a market capitalization of US$3.4b, and total annual CEO compensation was reported as US$7.2m for the year to December 2019. That's a notable increase of 67% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$950k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$4.2m. This suggests that Jack Kopnisky is paid more than the median for the industry. Furthermore, Jack Kopnisky directly owns US$9.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$950k

US$850k

13%

Other

US$6.2m

US$3.4m

87%

Total Compensation

US$7.2m

US$4.3m

100%

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Sterling Bancorp allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Sterling Bancorp's Growth

Earnings per share at Sterling Bancorp are much the same as they were three years ago, albeit with slightly higher. It saw its revenue drop 23% over the last year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sterling Bancorp Been A Good Investment?

With a three year total loss of 24% for the shareholders, Sterling Bancorp would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Sterling Bancorp pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Sterling Bancorp, and although EPS growth is steady, it hasn't set the world on fire. And the situation doesn't look all that good when you see Jack is remunerated higher than the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Sterling Bancorp that investors should think about before committing capital to this stock.

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.

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 (at) simplywallst.com.