Is ServisFirst Bancshares, Inc. (NASDAQ:SFBS) Overpaying Its CEO?

Tom Broughton has been the CEO of ServisFirst Bancshares, Inc. (NASDAQ:SFBS) since 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for ServisFirst Bancshares

How Does Tom Broughton’s Compensation Compare With Similar Sized Companies?

Our data indicates that ServisFirst Bancshares, Inc. is worth US$1.6b, and total annual CEO compensation is US$1.4m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$475k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.

Most shareholders would consider it a positive that Tom Broughton takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at ServisFirst Bancshares, below.

CEO-Compensation
CEO-Compensation

Is ServisFirst Bancshares, Inc. Growing?

Over the last three years ServisFirst Bancshares, Inc. has grown its earnings per share (EPS) by an average of 22% per year (using a line of best fit). Its revenue is up 13% over last year.

This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has ServisFirst Bancshares, Inc. Been A Good Investment?

ServisFirst Bancshares, Inc. has served shareholders reasonably well, with a total return of 20% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

It appears that ServisFirst Bancshares, Inc. remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Tom Broughton is overcompensated.

Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ServisFirst Bancshares (free visualization of insider trades).

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 editorial-team@simplywallst.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.