Yahoo Finance It's Unlikely That The CEO Of UMB Financial Corporation (NASDAQ:UMBF) Will See A Huge Pay Rise This Year
Key Insights
UMB Financial will host its Annual General Meeting on 30th of April
CEO J. Kemper's total compensation includes salary of US$1.04m
Total compensation is similar to the industry average
Over the past three years, UMB Financial's EPS grew by 6.5% and over the past three years, the total loss to shareholders 8.4%
In the past three years, the share price of UMB Financial Corporation (NASDAQ:UMBF) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 30th of April could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for UMB Financial
Comparing UMB Financial Corporation's CEO Compensation With The Industry
According to our data, UMB Financial Corporation has a market capitalization of US$4.1b, and paid its CEO total annual compensation worth US$4.8m over the year to December 2023. We note that's a decrease of 12% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the American Banks industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$4.6m. This suggests that UMB Financial remunerates its CEO largely in line with the industry average. Furthermore, J. Kemper directly owns US$170m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.0m | US$988k | 22% |
Other | US$3.7m | US$4.4m | 78% |
Total Compensation | US$4.8m | US$5.4m | 100% |
On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. UMB Financial sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
UMB Financial Corporation's Growth
UMB Financial Corporation has seen its earnings per share (EPS) increase by 6.5% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 UMB Financial Corporation Been A Good Investment?
With a three year total loss of 8.4% for the shareholders, UMB Financial Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for UMB Financial that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
