Our Take On CSX's (NASDAQ:CSX) CEO Salary
Jim Foote became the CEO of CSX Corporation (NASDAQ:CSX) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for CSX.
See our latest analysis for CSX
Comparing CSX Corporation's CEO Compensation With the industry
According to our data, CSX Corporation has a market capitalization of US$57b, and paid its CEO total annual compensation worth US$16m over the year to December 2019. That's a notable increase of 13% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. Accordingly, our analysis reveals that CSX Corporation pays Jim Foote north of the industry median. Furthermore, Jim Foote directly owns US$461k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$1.3m | US$1.2m | 8% |
Other | US$14m | US$13m | 92% |
Total Compensation | US$16m | US$14m | 100% |
On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. CSX pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
CSX Corporation's Growth
Over the past three years, CSX Corporation has seen its earnings per share (EPS) grow by 25% per year. Its revenue is down 11% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has CSX Corporation Been A Good Investment?
Boasting a total shareholder return of 57% over three years, CSX Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we noted earlier, CSX pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Jim's performance creates value for the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for CSX that investors should think about before committing capital to this stock.
Switching gears from CSX, 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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