Yahoo Finance Is Fifth Third Bancorp's (NASDAQ:FITB) CEO Salary Justified?
Greg Carmichael has been the CEO of Fifth Third Bancorp (NASDAQ:FITB) since 2015. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Fifth Third Bancorp
How Does Greg Carmichael's Compensation Compare With Similar Sized Companies?
According to our data, Fifth Third Bancorp has a market capitalization of US$21b, and paid its CEO total annual compensation worth US$11m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
That means Greg Carmichael receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Fifth Third Bancorp has changed over time.
Is Fifth Third Bancorp Growing?
Fifth Third Bancorp has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). It achieved revenue growth of 7.8% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Fifth Third Bancorp Been A Good Investment?
Fifth Third Bancorp has served shareholders reasonably well, with a total return of 22% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Remuneration for Greg Carmichael is close enough to the median pay for a CEO of a large company .
The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. Shareholders may want to check for free if Fifth Third Bancorp insiders are buying or selling shares.
Important note: Fifth Third Bancorp 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
