Should Shareholders Reconsider Comerica Incorporated's (NYSE:CMA) CEO Compensation Package?
Key Insights
- Comerica to hold its Annual General Meeting on 29th of April
- CEO Curt Farmer's total compensation includes salary of US$1.12m
- Total compensation is 44% above industry average
- Comerica's three-year loss to shareholders was 27% while its EPS was down 10% over the past three years
The results at Comerica Incorporated (NYSE:CMA) have been quite disappointing recently and CEO Curt Farmer bears some responsibility for this. At the upcoming AGM on 29th of April, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
See our latest analysis for Comerica
Comparing Comerica Incorporated's CEO Compensation With The Industry
Our data indicates that Comerica Incorporated has a market capitalization of US$6.6b, and total annual CEO compensation was reported as US$8.9m for the year to December 2024. Notably, that's an increase of 15% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
On comparing similar companies from the American Banks industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$6.2m. This suggests that Curt Farmer is paid more than the median for the industry. What's more, Curt Farmer holds US$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.1m | US$1.1m | 13% |
| Other | US$7.7m | US$6.6m | 87% |
| Total Compensation | US$8.9m | US$7.7m | 100% |
On an industry level, around 44% of total compensation represents salary and 56% is other remuneration. Comerica pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Comerica Incorporated's Growth
Comerica Incorporated has reduced its earnings per share by 10% a year over the last three years. In the last year, its revenue is down 2.4%.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Comerica Incorporated Been A Good Investment?
With a three year total loss of 27% for the shareholders, Comerica Incorporated would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
Whatever your view on compensation, you might want to check if insiders are buying or selling Comerica shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.