How Should Investors React To First Republic Bank’s (NYSE:FRC) CEO Pay?
Jim Herbert has been the CEO of First Republic Bank (NYSE:FRC) since 1985. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for First Republic Bank
How Does Jim Herbert’s Compensation Compare With Similar Sized Companies?
Our data indicates that First Republic Bank is worth US$14.7b, and total annual CEO compensation is US$8m. Notably, that’s an increase of 8.0% over the year before. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m.
So Jim Herbert receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at First Republic Bank, below.
Is First Republic Bank Growing?
On average over the last three years, First Republic Bank has grown earnings per share (EPS) by 13% each year. In the last year, its revenue is up 17%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has First Republic Bank Been A Good Investment?
I think that the total shareholder return of 40%, over three years, would leave most First Republic Bank shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
Jim Herbert is paid around the same as most CEOs of large companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if First Republic Bank insiders are buying or selling shares.
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
