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Frank Holding has been the CEO of First Citizens BancShares, Inc. (NASDAQ:FCNC.A) since 2008. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Frank Holding’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that First Citizens BancShares, Inc. has a market cap of US$5.2b, and is paying total annual CEO compensation of US$2.8m. (This is based on the year to December 2018). That’s less than last year. While we always look at total compensation first, we note that the salary component is less, at US$955k. 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$6.8m.
A first glance this seems like a real positive for shareholders, since Frank Holding is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at First Citizens BancShares has changed over time.
Is First Citizens BancShares, Inc. Growing?
Over the last three years First Citizens BancShares, Inc. has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). In the last year, its revenue is up 1.3%.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has First Citizens BancShares, Inc. Been A Good Investment?
I think that the total shareholder return of 84%, over three years, would leave most First Citizens BancShares, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
First Citizens BancShares, Inc. is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Frank Holding deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at First Citizens BancShares.
Important note: First Citizens 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.
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 email@example.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.