Is Prosperity Bancshares, Inc.’s (NYSE:PB) CEO Pay Justified?
In 2001 David Zalman was appointed CEO of Prosperity Bancshares, Inc. (NYSE:PB). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does David Zalman’s Compensation Compare With Similar Sized Companies?
According to our data, Prosperity Bancshares, Inc. has a market capitalization of US$4.6b, and pays its CEO total annual compensation worth US$2.4m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$927k. 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$5.1m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Prosperity Bancshares, below.
Is Prosperity Bancshares, Inc. Growing?
Prosperity Bancshares, Inc. saw earnings per share stay pretty flat over the last three years, albeit with a slight increase. In the last year, its revenue is up 1.4%.
I’d prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Prosperity Bancshares, Inc. Been A Good Investment?
Boasting a total shareholder return of 89% over three years, Prosperity Bancshares, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
It looks like Prosperity Bancshares, Inc. pays its CEO less than similar sized companies.
David Zalman is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Prosperity Bancshares.
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.
