Stock Analysis

Shareholders Will Probably Hold Off On Increasing Wintrust Financial Corporation's (NASDAQ:WTFC) CEO Compensation For The Time Being

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In the past three years, shareholders of Wintrust Financial Corporation (NASDAQ:WTFC) have seen a loss on their investment. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 27 May 2021. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Wintrust Financial

How Does Total Compensation For Ed Wehmer Compare With Other Companies In The Industry?

Our data indicates that Wintrust Financial Corporation has a market capitalization of US$4.4b, and total annual CEO compensation was reported as US$5.7m for the year to December 2020. That's a notable increase of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$3.4m. Accordingly, our analysis reveals that Wintrust Financial Corporation pays Ed Wehmer north of the industry median. Furthermore, Ed Wehmer directly owns US$8.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$1.2m US$1.2m 20%
Other US$4.6m US$4.0m 80%
Total CompensationUS$5.7m US$5.1m100%

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. It's interesting to note that Wintrust Financial allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NasdaqGS:WTFC CEO Compensation May 21st 2021

A Look at Wintrust Financial Corporation's Growth Numbers

Wintrust Financial Corporation's earnings per share (EPS) grew 8.3% per year over the last three years. In the last year, its revenue is up 15%.

We would argue that the modest growth in revenue is a notable positive. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Wintrust Financial Corporation Been A Good Investment?

With a three year total loss of 15% for the shareholders, Wintrust Financial Corporation would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Wintrust Financial (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the 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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