It would be hard to discount the role that CEO David Trautman has played in delivering the impressive results at Park National Corporation (NYSEMKT:PRK) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 26 April 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
Comparing Park National Corporation's CEO Compensation With the industry
At the time of writing, our data shows that Park National Corporation has a market capitalization of US$2.1b, and reported total annual CEO compensation of US$2.1m for the year to December 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$785k.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$2.5m. From this we gather that David Trautman is paid around the median for CEOs in the industry. What's more, David Trautman holds US$8.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. In Park National's case, non-salary compensation represents a greater slice of total remuneration, 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.
A Look at Park National Corporation's Growth Numbers
Over the past three years, Park National Corporation has seen its earnings per share (EPS) grow by 13% per year. It achieved revenue growth of 14% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Park National Corporation Been A Good Investment?
We think that the total shareholder return of 33%, over three years, would leave most Park National Corporation shareholders smiling. 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.
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Park National that investors should look into moving forward.
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