In 2011 Greg Becker was appointed CEO of SVB Financial Group (NASDAQ:SIVB). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. 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 Greg Becker’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that SVB Financial Group has a market cap of US$10b, and is paying total annual CEO compensation of US$6.1m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$946k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Most shareholders would consider it a positive that Greg Becker takes less compensation than the CEOs of most other large companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. So this free visualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.
The graphic below shows how CEO compensation at SVB Financial Group has changed from year to year.
Is SVB Financial Group Growing?
On average over the last three years, SVB Financial Group has grown earnings per share (EPS) by 30% each year. In the last year, its revenue is up 36%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.
Has SVB Financial Group Been A Good Investment?
Boasting a total shareholder return of 53% over three years, SVB Financial Group has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
SVB Financial Group is currently paying its CEO below what is normal for large companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Greg Becker deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at SVB Financial Group.
If you want to buy a stock that is better than SVB Financial Group, this free list of high return, low debt companies is a great place to look.
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.