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In 2017 Lee Gibson was appointed CEO of Southside Bancshares, Inc. (NASDAQ:SBSI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Lee Gibson's Compensation Compare With Similar Sized Companies?
According to our data, Southside Bancshares, Inc. has a market capitalization of US$1.1b, and pays its CEO total annual compensation worth US$1.6m. (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$646k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.7m.
Most shareholders would consider it a positive that Lee Gibson takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Southside Bancshares, below.
Is Southside Bancshares, Inc. Growing?
On average over the last three years, Southside Bancshares, Inc. has grown earnings per share (EPS) by 5.7% each year (using a line of best fit). It achieved revenue growth of 13% over the last year.
I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. Shareholders might be interested in this free visualization of analyst forecasts.
Has Southside Bancshares, Inc. Been A Good Investment?
Southside Bancshares, Inc. has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Southside Bancshares, Inc. pays its CEO less than similar sized companies.
Lee Gibson is paid less than what is normal at similar size companies, and but overall performance has left me uninspired. So shareholders may not be elated, but they shouldn't be worried about the CEO compensation, either. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Southside Bancshares (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 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.