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Should You Worry About Provident Financial Services, Inc.'s (NYSE:PFS) CEO Pay?

Simply Wall St

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In 2009 Chris Martin was appointed CEO of Provident Financial Services, Inc. (NYSE:PFS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

See our latest analysis for Provident Financial Services

How Does Chris Martin's Compensation Compare With Similar Sized Companies?

According to our data, Provident Financial Services, Inc. has a market capitalization of US$1.7b, and pays its CEO total annual compensation worth US$2.2m. (This number is for the twelve months until December 2018). That's less than last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$739k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.6m.

A first glance this seems like a real positive for shareholders, since Chris Martin is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

You can see, below, how CEO compensation at Provident Financial Services has changed over time.

NYSE:PFS CEO Compensation, April 4th 2019

Is Provident Financial Services, Inc. Growing?

On average over the last three years, Provident Financial Services, Inc. has grown earnings per share (EPS) by 7.9% each year (using a line of best fit). In the last year, its revenue is up 2.2%.

I'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.

Has Provident Financial Services, Inc. Been A Good Investment?

I think that the total shareholder return of 47%, over three years, would leave most Provident Financial Services, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Provident Financial Services, Inc. is currently paying its CEO below what is normal for companies of its size.

Chris Martin is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. Although we could see higher growth, we'd argue the remuneration is modest, based on these observations. So you may want to check if insiders are buying Provident Financial Services 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 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. Thank you for reading.