Greg Becker became the CEO of SVB Financial Group (NASDAQ:SIVB) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for SVB Financial Group.
How Does Total Compensation For Greg Becker Compare With Other Companies In The Industry?
Our data indicates that SVB Financial Group has a market capitalization of US$12b, and total annual CEO compensation was reported as US$11m for the year to December 2019. That's a notable increase of 37% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$995k.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$13m. So it looks like SVB Financial Group compensates Greg Becker in line with the median for the industry. Moreover, Greg Becker also holds US$18m worth of SVB Financial Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that SVB Financial Group allocates a smaller portion of compensation to salary in comparison 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.
A Look at SVB Financial Group's Growth Numbers
Over the past three years, SVB Financial Group has seen its earnings per share (EPS) grow by 35% per year. Its revenue is up 9.7% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 SVB Financial Group Been A Good Investment?
SVB Financial Group has served shareholders reasonably well, with a total return of 27% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
As we touched on above, SVB Financial Group is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, it's admirable that over the last three years, earnings growth for the company has been impressive, though the same can't be said for investor returns. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for SVB Financial Group that you should be aware of before investing.
Important note: SVB Financial Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
This article by Simply Wall St is general in nature. 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.
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