Is Prosperity Bancshares Inc’s (NYSE:PB) CEO Pay Justified?

In 2001 David Zalman was appointed CEO of Prosperity Bancshares Inc (NYSE:PB). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Prosperity Bancshares

How Does David Zalman’s Compensation Compare With Similar Sized Companies?

Our data indicates that Prosperity Bancshares Inc is worth US$4.3b, and total annual CEO compensation is US$2m. That’s less than last year. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$5m.

Most shareholders would consider it a positive that David Zalman takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.

You can see, below, how CEO compensation at Prosperity Bancshares has changed over time.

NYSE:PB CEO Compensation October 24th 18
NYSE:PB CEO Compensation October 24th 18

Is Prosperity Bancshares Inc Growing?

On average over the last three years, Prosperity Bancshares Inc has shrunk earnings per share by 1.5% each year. Revenue was pretty flat on last year.

In the last three years the company has failed to grow earnings per s. And the flat revenue hardly impresses. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Prosperity Bancshares Inc Been A Good Investment?

With a total shareholder return of 29% over three years, Prosperity Bancshares Inc shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

It looks like Prosperity Bancshares Inc pays its CEO less than similar sized companies.

The compensation paid to David Zalman is lower than is usual at similar sized companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. We would like to see EPS growth from the business, although we wouldn’t say the CEO pay is high. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Prosperity Bancshares Inc (free visualization of insider trades).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.