Here's Why Shareholders May Want To Be Cautious With Increasing Veritex Holdings, Inc.'s (NASDAQ:VBTX) CEO Pay Packet

By
Simply Wall St
Published
May 11, 2021
NasdaqGM:VBTX
Source: Shutterstock

Performance at Veritex Holdings, Inc. (NASDAQ:VBTX) has been reasonably good and CEO Charles Holland has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 18 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Veritex Holdings

How Does Total Compensation For Charles Holland Compare With Other Companies In The Industry?

Our data indicates that Veritex Holdings, Inc. has a market capitalization of US$1.7b, and total annual CEO compensation was reported as US$3.5m for the year to December 2020. We note that's a decrease of 11% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$725k.

On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$2.4m. This suggests that Charles Holland is paid more than the median for the industry. What's more, Charles Holland holds US$5.7m 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$725k US$600k 21%
Other US$2.8m US$3.3m 79%
Total CompensationUS$3.5m US$3.9m100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. In Veritex Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NasdaqGM:VBTX CEO Compensation May 12th 2021

Veritex Holdings, Inc.'s Growth

Veritex Holdings, Inc.'s earnings per share (EPS) grew 24% per year over the last three years. It achieved revenue growth of 13% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Veritex Holdings, Inc. Been A Good Investment?

With a total shareholder return of 26% over three years, Veritex Holdings, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Veritex Holdings that investors should think about before committing capital to this stock.

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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.