Richard Adams became the CEO of United Bankshares, Inc. (NASDAQ:UBSI) in 1984. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Richard Adams’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that United Bankshares, Inc. has a market cap of US$3.9b, and is paying total annual CEO compensation of US$3.3m. (This figure is for the year to December 2018). That’s below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.
A first glance this seems like a real positive for shareholders, since Richard Adams is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at United Bankshares has changed over time.
Is United Bankshares, Inc. Growing?
United Bankshares, Inc. has increased its earnings per share (EPS) by an average of 1.3% a year, over the last three years (using a line of best fit). It achieved revenue growth of 6.2% over the last year.
I’m not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors I’d say performance has been pretty decent, though not amazing. It could be important to check this free visual depiction of what analysts expect for the future.
Has United Bankshares, Inc. Been A Good Investment?
United Bankshares, Inc. has served shareholders reasonably well, with a total return of 21% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It looks like United Bankshares, Inc. pays its CEO less than similar sized companies.
It’s well worth noting that while Richard Adams is paid less than most company leaders (at companies of similar size), share price performance has been somewhat uninspiring. So shareholders may not be elated, but they shouldn’t be worried about the CEO compensation, either. Whatever your view on compensation, you might want to check if insiders are buying or selling United Bankshares shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.