How Does Jumbo Interactive's (ASX:JIN) CEO Pay Compare With Company Performance?
This article will reflect on the compensation paid to Mike Veverka who has served as CEO of Jumbo Interactive Limited (ASX:JIN) since 1999. This analysis will also assess whether Jumbo Interactive pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Jumbo Interactive
How Does Total Compensation For Mike Veverka Compare With Other Companies In The Industry?
At the time of writing, our data shows that Jumbo Interactive Limited has a market capitalization of AU$799m, and reported total annual CEO compensation of AU$1.3m for the year to June 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at AU$843.3k constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between AU$531m and AU$2.1b, we discovered that the median CEO total compensation of that group was AU$1.3m. From this we gather that Mike Veverka is paid around the median for CEOs in the industry. Moreover, Mike Veverka also holds AU$9.0m worth of Jumbo Interactive stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$843k | AU$489k | 65% |
Other | AU$459k | AU$826k | 35% |
Total Compensation | AU$1.3m | AU$1.3m | 100% |
On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. In Jumbo Interactive's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Jumbo Interactive Limited's Growth
Jumbo Interactive Limited's earnings per share (EPS) grew 35% per year over the last three years. It achieved revenue growth of 9.1% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Jumbo Interactive Limited Been A Good Investment?
We think that the total shareholder return of 332%, over three years, would leave most Jumbo Interactive Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
As previously discussed, Mike is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
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 Jumbo Interactive 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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