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Mark Mondello became the CEO of Jabil Inc. (NYSE:JBL) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mark Mondello's Compensation Compare With Similar Sized Companies?
According to our data, Jabil Inc. has a market capitalization of US$4.9b, and pays its CEO total annual compensation worth US$11m. (This number is for the twelve months until August 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.
As you can see, Mark Mondello is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Jabil Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Jabil, below.
Is Jabil Inc. Growing?
On average over the last three years, Jabil Inc. has shrunk earnings per share by 12% each year (measured with a line of best fit). Its revenue is up 15% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Jabil Inc. Been A Good Investment?
Boasting a total shareholder return of 78% over three years, Jabil Inc. 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.
We examined the amount Jabil Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
However, we can't argue with the strong returns to shareholders, over the same time period. 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 Jabil (free visualization of insider trades).
If you want to buy a stock that is better than Jabil, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.