Here's Why Spirit of Texas Bancshares, Inc.'s (NASDAQ:STXB) CEO Compensation Is The Least Of Shareholders' Concerns

By
Simply Wall St
Published
May 21, 2021
Source: Shutterstock

CEO Dean Bass has done a decent job of delivering relatively good performance at Spirit of Texas Bancshares, Inc. (NASDAQ:STXB) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 27 May 2021. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Spirit of Texas Bancshares

How Does Total Compensation For Dean Bass Compare With Other Companies In The Industry?

At the time of writing, our data shows that Spirit of Texas Bancshares, Inc. has a market capitalization of US$396m, and reported total annual CEO compensation of US$1.0m for the year to December 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is US$574.8k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.1m. So it looks like Spirit of Texas Bancshares compensates Dean Bass in line with the median for the industry. What's more, Dean Bass holds US$4.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$575k US$535k 55%
Other US$463k US$523k 45%
Total CompensationUS$1.0m US$1.1m100%

Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. Spirit of Texas Bancshares pays out 55% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
NasdaqGS:STXB CEO Compensation May 22nd 2021

A Look at Spirit of Texas Bancshares, Inc.'s Growth Numbers

Spirit of Texas Bancshares, Inc.'s earnings per share (EPS) grew 34% per year over the last three years. It achieved revenue growth of 21% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Spirit of Texas Bancshares, Inc. Been A Good Investment?

Spirit of Texas Bancshares, Inc. has served shareholders reasonably well, with a total return of 11% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Spirit of Texas Bancshares we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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