Stock Analysis

We Think Signature Bank's (NASDAQ:SBNY) CEO Compensation Looks Fair

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The performance at Signature Bank (NASDAQ:SBNY) has been quite strong recently and CEO Joe DePaolo has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 22 April 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Signature Bank

Comparing Signature Bank's CEO Compensation With the industry

Our data indicates that Signature Bank has a market capitalization of US$12b, and total annual CEO compensation was reported as US$6.7m for the year to December 2020. That's a notable decrease of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$927k.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$8.0m. This suggests that Signature Bank remunerates its CEO largely in line with the industry average. Furthermore, Joe DePaolo directly owns US$54m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$927k US$927k 14%
Other US$5.7m US$6.9m 86%
Total CompensationUS$6.7m US$7.8m100%

Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. Signature Bank pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

NasdaqGS:SBNY CEO Compensation April 16th 2021

A Look at Signature Bank's Growth Numbers

Signature Bank has seen its earnings per share (EPS) increase by 12% a year over the past three years. Revenue was pretty flat on last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Signature Bank Been A Good Investment?

We think that the total shareholder return of 87%, over three years, would leave most Signature Bank 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.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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 Signature Bank that you should be aware of before investing.

Switching gears from Signature Bank, 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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