George Gleason has been the CEO of Bank OZK (NASDAQ:OZK) since 1979, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Bank OZK pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Bank OZK's CEO Compensation With the industry
Our data indicates that Bank OZK has a market capitalization of US$2.6b, and total annual CEO compensation was reported as US$5.1m for the year to December 2019. We note that's a decrease of 19% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$4.4m. So it looks like Bank OZK compensates George Gleason in line with the median for the industry. Furthermore, George Gleason directly owns US$120m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Bank OZK 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.
Bank OZK's Growth
Over the last three years, Bank OZK has shrunk its earnings per share by 10% per year. Its revenue is down 19% over the previous year.
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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Bank OZK Been A Good Investment?
With a three year total loss of 53% for the shareholders, Bank OZK would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, Bank OZK 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. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Bank OZK that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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