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Tom Broughton has been the CEO of ServisFirst Bancshares, Inc. (NASDAQ:SFBS) since 2007. 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 – 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 Tom Broughton’s Compensation Compare With Similar Sized Companies?
Our data indicates that ServisFirst Bancshares, Inc. is worth US$1.8b, and total annual CEO compensation is US$1.4m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$475k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.9m.
A first glance this seems like a real positive for shareholders, since Tom Broughton is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at ServisFirst Bancshares has changed over time.
Is ServisFirst Bancshares, Inc. Growing?
On average over the last three years, ServisFirst Bancshares, Inc. has grown earnings per share (EPS) by 22% each year (using a line of best fit). It achieved revenue growth of 15% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
Has ServisFirst Bancshares, Inc. Been A Good Investment?
With a total shareholder return of 28% over three years, ServisFirst Bancshares, Inc. shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
It appears that ServisFirst Bancshares, Inc. remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn’t mean that Tom Broughton is paid too much.
It’s good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. So you may want to check if insiders are buying ServisFirst Bancshares shares with their own money (free access).
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.
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 firstname.lastname@example.org. 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.