Here's What We Learned About The CEO Pay At Expeditors International of Washington, Inc. (NASDAQ:EXPD)
Jeff Musser has been the CEO of Expeditors International of Washington, Inc. (NASDAQ:EXPD) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Expeditors International of Washington pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Expeditors International of Washington
Comparing Expeditors International of Washington, Inc.'s CEO Compensation With the industry
According to our data, Expeditors International of Washington, Inc. has a market capitalization of US$14b, and paid its CEO total annual compensation worth US$6.4m over the year to December 2019. That's a slightly lower by 7.1% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$100k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$4.2m. This suggests that Jeff Musser is paid more than the median for the industry. What's more, Jeff Musser holds US$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$100k | US$100k | 2% |
Other | US$6.3m | US$6.8m | 98% |
Total Compensation | US$6.4m | US$6.9m | 100% |
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Jeff Musser as compared to non-salary compensation over the one-year period examined. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Expeditors International of Washington, Inc.'s Growth Numbers
Expeditors International of Washington, Inc.'s earnings per share (EPS) grew 15% per year over the last three years. Its revenue is up 2.6% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Expeditors International of Washington, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Expeditors International of Washington, Inc. for providing a total return of 60% over three years. 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.
In Summary...
Expeditors International of Washington prefers rewarding its CEO through non-salary benefits. As we touched on above, Expeditors International of Washington, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But earnings growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Jeff's performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Expeditors International of Washington that investors should think about before committing capital to this stock.
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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