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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. 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. This process should give us an idea about how appropriately the CEO is paid.
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$5.6m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$979k. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO compensation was US$6.4m.
So Matt Wagner is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at PacWest Bancorp, below.
Is PacWest Bancorp Growing?
PacWest Bancorp has increased its earnings per share (EPS) by an average of 9.2% a year, over the last three years (using a line of best fit). It achieved revenue growth of 9.0% over the last year.
I’d prefer higher revenue growth, but I’m happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.
Has PacWest Bancorp Been A Good Investment?
I think that the total shareholder return of 41%, over three years, would leave most PacWest Bancorp shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Matt Wagner is close enough to the median pay for a CEO of a similar sized company .
The company isn’t showing particularly great growth, but shareholder returns have been pleasing. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling PacWest Bancorp 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.