In 2016 Phil Green was appointed CEO of Cullen/Frost Bankers, Inc. (NYSE:CFR). 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.
How Does Phil Green’s Compensation Compare With Similar Sized Companies?
According to our data, Cullen/Frost Bankers, Inc. has a market capitalization of US$5.9b, and pays its CEO total annual compensation worth US$4.2m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$975k. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO compensation was US$7.0m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Cullen/Frost Bankers, below.
Is Cullen/Frost Bankers, Inc. Growing?
Over the last three years Cullen/Frost Bankers, Inc. has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). It achieved revenue growth of 9.8% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Cullen/Frost Bankers, Inc. Been A Good Investment?
Boasting a total shareholder return of 87% over three years, Cullen/Frost Bankers, 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.
Cullen/Frost Bankers, Inc. is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Phil Green deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Cullen/Frost Bankers.
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow 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 firstname.lastname@example.org.