David Zalman has been the CEO of Prosperity Bancshares, Inc. (NYSE:PB) since 2001. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Zalman’s Compensation Compare With Similar Sized Companies?
According to our data, Prosperity Bancshares, Inc. has a market capitalization of US$6.9b, and paid its CEO total annual compensation worth US$4.9m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$944k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.3m.
So David Zalman receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Prosperity Bancshares has changed over time.
Is Prosperity Bancshares, Inc. Growing?
Prosperity Bancshares, Inc. has increased its earnings per share (EPS) by an average of 7.6% a year, over the last three years (using a line of best fit). Its revenue is up 12% over last year.
This revenue growth could really point to a brighter future. And the modest growth in earnings per share isn’t bad, either. Although we’ll stop short of calling the stock a top performer, we think the company has potential. You might want to check this free visual report on analyst forecasts for future earnings.
Has Prosperity Bancshares, Inc. Been A Good Investment?
Prosperity Bancshares, Inc. has generated a total shareholder return of 4.7% over three years, so most shareholders wouldn’t be too disappointed. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Remuneration for David Zalman is close enough to the median pay for a CEO of a similar sized company .
The company isn’t showing particularly great growth, and shareholder turns haven’t been particularly inspiring in the last few years. But we don’t think the CEO compensation is a problem. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Prosperity Bancshares.
Important note: Prosperity Bancshares may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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