Dennis Nixon has been the CEO of International Bancshares Corporation (NASDAQ:IBOC) since 1979. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dennis Nixon’s Compensation Compare With Similar Sized Companies?
Our data indicates that International Bancshares Corporation is worth US$2.8b, and total annual CEO compensation was reported as US$2.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$660k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.
This would give shareholders a good impression of the company, since most similar size companies have to 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.
The graphic below shows how CEO compensation at International Bancshares has changed from year to year.
Is International Bancshares Corporation Growing?
Over the last three years International Bancshares Corporation has grown its earnings per share (EPS) by an average of 19% per year (using a line of best fit). It achieved revenue growth of 2.5% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don’t have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has International Bancshares Corporation Been A Good Investment?
International Bancshares Corporation has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It appears that International Bancshares Corporation remunerates its CEO below most similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The total shareholder return might not be amazing, but that doesn’t mean that Dennis Nixon is paid too much. It’s great to see a company that pays its CEO reasonably, even while growing. But for me, it’s even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling International Bancshares shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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