Andy Cecere has been the CEO of U.S. Bancorp (NYSE:USB) since 2017. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. 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.
How Does Andy Cecere's Compensation Compare With Similar Sized Companies?
According to our data, U.S. Bancorp has a market capitalization of US$88b, and paid its CEO total annual compensation worth US$13m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Andy Cecere 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.
The graphic below shows how CEO compensation at U.S. Bancorp has changed from year to year.
Is U.S. Bancorp Growing?
U.S. Bancorp has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 2.6%.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has U.S. Bancorp Been A Good Investment?
I think that the total shareholder return of 36%, over three years, would leave most U.S. Bancorp shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Andy Cecere is paid around the same as most CEOs of large companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying U.S. Bancorp shares with their own money (free access).
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 email@example.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. Thank you for reading.