Is Veritex Holdings, Inc.’s (NASDAQ:VBTX) CEO Overpaid Relative To Its Peers?

Charles Holland became the CEO of Veritex Holdings, Inc. (NASDAQ:VBTX) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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.

View our latest analysis for Veritex Holdings

How Does Charles Holland’s Compensation Compare With Similar Sized Companies?

Our data indicates that Veritex Holdings, Inc. is worth US$1.4b, and total annual CEO compensation is US$1.0m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$460k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.0m.

A first glance this seems like a real positive for shareholders, since Charles Holland is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Veritex Holdings, below.

NasdaqGM:VBTX CEO Compensation, July 22nd 2019
NasdaqGM:VBTX CEO Compensation, July 22nd 2019

Is Veritex Holdings, Inc. Growing?

On average over the last three years, Veritex Holdings, Inc. has grown earnings per share (EPS) by 11% each year (using a line of best fit). Its revenue is up 82% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

Has Veritex Holdings, Inc. Been A Good Investment?

Boasting a total shareholder return of 54% over three years, Veritex Holdings, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Veritex Holdings, Inc. is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Charles Holland deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Veritex Holdings shares (free trial).

Important note: Veritex Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.