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Matt Wagner became the CEO of PacWest Bancorp (NASDAQ:PACW) in 2000. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Matt Wagner’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that PacWest Bancorp has a market cap of US$4.8b, and is paying total annual CEO compensation of US$6.2m. (This figure is for the year to December 2018). We note that’s an increase of 11% above last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
So Matt Wagner is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at PacWest Bancorp has changed from year to year.
Is PacWest Bancorp Growing?
PacWest Bancorp has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). It achieved revenue growth of 2.9% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has PacWest Bancorp Been A Good Investment?
PacWest Bancorp has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Matt Wagner is paid around the same as most CEOs of similar size companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. As a result of these considerations, I would suggest the CEO pay is reasonable. So you may want to check if insiders are buying PacWest Bancorp shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.