Jack Kopnisky became the CEO of Sterling Bancorp (NYSE:STL) in 2011, 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 assess whether Sterling Bancorp pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Jack Kopnisky Compare With Other Companies In The Industry?
Our data indicates that Sterling Bancorp has a market capitalization of US$2.4b, and total annual CEO compensation was reported as US$7.2m for the year to December 2019. We note that’s an increase of 67% above last year. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$950k.
On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$3.4m. Accordingly, our analysis reveals that Sterling Bancorp pays Jack Kopnisky north of the industry median. Moreover, Jack Kopnisky also holds US$6.5m worth of Sterling Bancorp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
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. Sterling Bancorp pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.
Sterling Bancorp’s Growth
Sterling Bancorp’s earnings per share (EPS) grew 6.4% per year over the last three years. In the last year, its revenue is down 20%.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPSgrowth gives us some relief. It’s hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Sterling Bancorp Been A Good Investment?
With a three year total loss of 43% for the shareholders, Sterling Bancorp would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Jack is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing for Sterling Bancorp, and although EPS growth is steady, it hasn’t set the world on fire. This doesn’t look good when you see that Jack is earning more than the industry median. With such poor returns, we would understand if shareholders had concerns related to the CEO’s pay.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That’s why we did some digging and identified 1 warning sign for Sterling Bancorp that you should be aware of before investing.
Important note: Sterling Bancorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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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