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David Trautman has been the CEO of Park National Corporation (NYSEMKT:PRK) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Park National pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Park National Corporation's CEO Compensation With the industry
According to our data, Park National Corporation has a market capitalization of US$1.4b, and paid its CEO total annual compensation worth US$2.1m over the year to December 2019. We note that's an increase of 17% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$785k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$3.6m. In other words, Park National pays its CEO lower than the industry median. What's more, David Trautman holds US$5.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Park National sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Park National Corporation's Growth Numbers
Park National Corporation has seen its earnings per share (EPS) increase by 5.0% a year over the past three years. It achieved revenue growth of 9.6% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Park National Corporation Been A Good Investment?
With a three year total loss of 0.6% for the shareholders, Park National Corporation would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, David is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the EPS growth is lacking, just like the returns (over three years). So while we don't think, David is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Park National that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
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