Shareholders May Be More Conservative With BankUnited, Inc.'s (NYSE:BKU) CEO Compensation For Now

Simply Wall St
May 18, 2021
Source: Shutterstock

Under the guidance of CEO Raj Singh, BankUnited, Inc. (NYSE:BKU) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for BankUnited

Comparing BankUnited, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that BankUnited, Inc. has a market capitalization of US$4.3b, and reported total annual CEO compensation of US$4.7m for the year to December 2020. We note that's a decrease of 12% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$3.4m. This suggests that Raj Singh is paid more than the median for the industry. Moreover, Raj Singh also holds US$18m worth of BankUnited stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$1.0m US$1.0m 21%
Other US$3.7m US$4.3m 79%
Total CompensationUS$4.7m US$5.3m100%

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 BankUnited's 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.

NYSE:BKU CEO Compensation May 19th 2021

BankUnited, Inc.'s Growth

BankUnited, Inc. has reduced its earnings per share by 16% a year over the last three years. In the last year, its revenue is up 17%.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has BankUnited, Inc. Been A Good Investment?

BankUnited, Inc. has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Although the company has performed relatively well, we still think there are some areas that could be improved. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for BankUnited that investors should look into moving forward.

Switching gears from BankUnited, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

If you decide to trade BankUnited, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.