George Gleason has been the CEO of Bank OZK (NASDAQ:OZK) since 1979, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Bank OZK pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For George Gleason Compare With Other Companies In The Industry?
According to our data, Bank OZK has a market capitalization of US$3.6b, and paid its CEO total annual compensation worth US$5.1m over the year to December 2019. We note that's a decrease of 19% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$4.4m. So it looks like Bank OZK compensates George Gleason in line with the median for the industry. Furthermore, George Gleason directly owns US$163m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Bank OZK allocates a smaller portion of compensation to salary in comparison 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.
Bank OZK's Growth
Over the last three years, Bank OZK has shrunk its earnings per share by 10% per year. Its revenue is down 21% over the previous year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Bank OZK Been A Good Investment?
With a three year total loss of 31% for the shareholders, Bank OZK would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, George is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
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 2 warning signs for Bank OZK that investors should think about before committing capital to this stock.
Switching gears from Bank OZK, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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