Is SVB Financial Group’s (NASDAQ:SIVB) CEO Overpaid Relative To Its Peers?

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Greg Becker has been the CEO of SVB Financial Group (NASDAQ:SIVB) since 2011. First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for SVB Financial Group

How Does Greg Becker’s Compensation Compare With Similar Sized Companies?

Our data indicates that SVB Financial Group is worth US$11b, and total annual CEO compensation is US$7.6m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$954k. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.

This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at SVB Financial Group has changed over time.

NasdaqGS:SIVB CEO Compensation, July 16th 2019
NasdaqGS:SIVB CEO Compensation, July 16th 2019

Is SVB Financial Group Growing?

Over the last three years SVB Financial Group has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). It achieved revenue growth of 36% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

Has SVB Financial Group Been A Good Investment?

I think that the total shareholder return of 112%, over three years, would leave most SVB Financial Group 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…

It looks like SVB Financial Group pays its CEO less than the average at large companies. Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Greg Becker deserves a raise!

It’s not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying SVB Financial Group shares with their own money (free access).

If you want to buy a stock that is better than SVB Financial Group, this free list of high return, low debt companies is a great place to look.

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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.