Devin Wenig has been the CEO of eBay Inc. (NASDAQ:EBAY) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Devin Wenig’s Compensation Compare With Similar Sized Companies?
Our data indicates that eBay Inc. is worth US$34b, and total annual CEO compensation is US$18m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that eBay Inc. pays Devin Wenig more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at eBay has changed from year to year.
Is eBay Inc. Growing?
On average over the last three years, eBay Inc. has shrunk earnings per share by 29% each year (measured with a line of best fit). Its revenue is up 8.3% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has eBay Inc. Been A Good Investment?
Boasting a total shareholder return of 53% over three years, eBay Inc. has done well by shareholders. 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.
We examined the amount eBay Inc. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
On the other hand, returns have been good, so the company is doing something right. Considering this, shareholders are probably not too worried about the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling eBay (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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