Frank Holding became the CEO of First Citizens BancShares, Inc. (NASDAQ:FCNC.A) in 2008, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing First Citizens BancShares, Inc.’s CEO Compensation With the industry
At the time of writing, our data shows that First Citizens BancShares, Inc. has a market capitalization of US$4.1b, and reported total annual CEO compensation of US$4.0m for the year to December 2019. We note that’s an increase of 43% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$964k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$4.6m. This suggests that First Citizens BancShares remunerates its CEO largely in line with the industry average. What’s more, Frank Holding holds US$1.2b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. In First Citizens BancShares’ case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.
First Citizens BancShares, Inc.’s Growth
First Citizens BancShares, Inc.’s earnings per share (EPS) grew 17% per year over the last three years. It achieved revenue growth of 5.0% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has First Citizens BancShares, Inc. Been A Good Investment?
First Citizens BancShares, Inc. has served shareholders reasonably well, with a total return of 25% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
As we noted earlier, First Citizens BancShares pays its CEO in line with similar-sized companies belonging to the same industry. However, it’s admirable that over the last three years, earnings growth for the company has been impressive, though the same can’t be said for investor returns. Considering overall performance, we’d say the compensation is fair, although stockholders will want to see higher returns moving forward.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for First Citizens BancShares that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
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