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The decent performance at J2 Global, Inc. (NASDAQ:JCOM) recently will please most shareholders as they go into the AGM coming up on 07 May 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
Comparing J2 Global, Inc.'s CEO Compensation With the industry
Our data indicates that J2 Global, Inc. has a market capitalization of US$5.5b, and total annual CEO compensation was reported as US$2.3m for the year to December 2020. That's a fairly small increase of 5.0% over the previous 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 same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$6.2m. That is to say, Vivek Shah is paid under the industry median. What's more, Vivek Shah holds US$71m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 11% of total compensation represents salary and 89% is other remuneration. J2 Global is paying a higher share of its remuneration through a 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.
A Look at J2 Global, Inc.'s Growth Numbers
J2 Global, Inc.'s earnings per share (EPS) grew 3.9% per year over the last three years. Its revenue is up 8.5% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 J2 Global, Inc. Been A Good Investment?
We think that the total shareholder return of 53%, over three years, would leave most J2 Global, 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.
Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in J2 Global we think you should know about.
Switching gears from J2 Global, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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