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Shareholders Will Probably Not Have Any Issues With The Charles Schwab Corporation's (NYSE:SCHW) CEO Compensation

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·3 min read
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Performance at The Charles Schwab Corporation (NYSE:SCHW) has been reasonably good and CEO Walt Bettinger has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 13 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Charles Schwab

How Does Total Compensation For Walt Bettinger Compare With Other Companies In The Industry?

According to our data, The Charles Schwab Corporation has a market capitalization of US$134b, and paid its CEO total annual compensation worth US$16m over the year to December 2020. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$13m. This suggests that Charles Schwab remunerates its CEO largely in line with the industry average. What's more, Walt Bettinger holds US$26m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$1.4m

US$1.3m

9%

Other

US$15m

US$15m

91%

Total Compensation

US$16m

US$16m

100%

Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. Charles Schwab pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

The Charles Schwab Corporation's Growth

The Charles Schwab Corporation has seen its earnings per share (EPS) increase by 9.2% a year over the past three years. It achieved revenue growth of 30% over the last year.

It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Charles Schwab Corporation Been A Good Investment?

With a total shareholder return of 27% over three years, The Charles Schwab Corporation shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Charles Schwab that investors should look into moving forward.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.