Yahoo Finance Does First Financial Bankshares, Inc.'s (NASDAQ:FFIN) CEO Salary Reflect Performance?
In 2001, F. Dueser was appointed CEO of First Financial Bankshares, Inc. (NASDAQ:FFIN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for First Financial Bankshares
How Does F. Dueser's Compensation Compare With Similar Sized Companies?
According to our data, First Financial Bankshares, Inc. has a market capitalization of US$3.9b, and paid its CEO total annual compensation worth US$1.9m over the year to December 2019. That's a notable increase of 30% on last year. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$6.0m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of First Financial Bankshares. Talking in terms of the sector, salary represented approximately 43% of total compensation out of all the companies we analysed, while other remuneration made up 57% of the pie. So it seems like there isn't a significant difference between First Financial Bankshares and the broader market, in terms of salary allocation in the overall compensation package.
At first glance this seems like a real positive for shareholders, since F. Dueser is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business. The graphic below shows how CEO compensation at First Financial Bankshares has changed from year to year.
Is First Financial Bankshares, Inc. Growing?
On average over the last three years, First Financial Bankshares, Inc. has seen earnings per share (EPS) move in a favourable direction by 15% each year (using a line of best fit). Its revenue is up 7.5% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has First Financial Bankshares, Inc. Been A Good Investment?
I think that the total shareholder return of 50%, over three years, would leave most First Financial Bankshares, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
First Financial Bankshares, Inc. is currently paying its CEO below what is normal for companies of its size.
Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that F. Dueser deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. CEO compensation is an important area to keep your eyes on, but we've also identified 3 warning signs for First Financial Bankshares (1 is potentially serious!) that you should be aware of before investing here.
Important note: First Financial Bankshares may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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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. Thank you for reading.
