Is Pinnacle Financial Partners, Inc.'s (NASDAQ:PNFP) CEO Overpaid Relative To Its Peers?
Michael Turner became the CEO of Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) in 2000. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Pinnacle Financial Partners
How Does Michael Turner's Compensation Compare With Similar Sized Companies?
Our data indicates that Pinnacle Financial Partners, Inc. is worth US$2.7b, and total annual CEO compensation was reported as US$4.9m for the year to December 2019. We note that's an increase of 13% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.8m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Pinnacle Financial Partners stands. On a sector level, around 43% of total compensation represents salary and 57% is other remuneration. Readers will want to know that Pinnacle Financial Partners pays a modest slice of remuneration through salary, as compared to the wider sector.
So Michael Turner receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see a visual representation of the CEO compensation at Pinnacle Financial Partners, below.
Is Pinnacle Financial Partners, Inc. Growing?
Pinnacle Financial Partners, Inc. has seen earnings per share (EPS) move positively by an average of 21% a year, over the last three years (using a line of best fit). Its revenue is up 1.4% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Pinnacle Financial Partners, Inc. Been A Good Investment?
Since shareholders would have lost about 45% over three years, some Pinnacle Financial Partners, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Michael Turner is paid around what is normal for the leaders of comparable size companies.
We'd say the company can boast of its EPS growth, but it's disappointing to see negative shareholder returns over three years. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. Moving away from CEO compensation for the moment, we've identified 1 warning sign for Pinnacle Financial Partners that you should be aware of before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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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