F5, Inc.'s (NASDAQ:FFIV) CEO Compensation Looks Acceptable To Us And Here's Why
Key Insights
F5's Annual General Meeting to take place on 14th of March
CEO Francois Locoh-Donou's total compensation includes salary of US$962.0k
The overall pay is 35% below the industry average
F5's three-year loss to shareholders was 1.6% while its EPS grew by 17% over the past three years
The performance at F5, Inc. (NASDAQ:FFIV) has been rather lacklustre of late and shareholders may be wondering what CEO Francois Locoh-Donou is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 14th of March. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.
View our latest analysis for F5
How Does Total Compensation For Francois Locoh-Donou Compare With Other Companies In The Industry?
At the time of writing, our data shows that F5, Inc. has a market capitalization of US$11b, and reported total annual CEO compensation of US$11m for the year to September 2023. That's a notable decrease of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$962k.
In comparison with other companies in the American Communications industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$17m. Accordingly, F5 pays its CEO under the industry median. What's more, Francois Locoh-Donou holds US$24m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$962k | US$925k | 9% |
Other | US$9.9m | US$12m | 91% |
Total Compensation | US$11m | US$13m | 100% |
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. F5 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.
F5, Inc.'s Growth
F5, Inc. has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 3.6% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 F5, Inc. Been A Good Investment?
Since shareholders would have lost about 1.6% over three years, some F5, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Despite the strong EPS growth recently, the share price has not performed to expectations and it suggests that other factors might be driving it, apart from fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.
Shareholders may want to check for free if F5 insiders are buying or selling shares.
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.
