Is Jack Henry & Associates, Inc.’s (NASDAQ:JKHY) CEO Paid At A Competitive Rate?
Dave Foss has been the CEO of Jack Henry & Associates, Inc. (NASDAQ:JKHY) since 2016. First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. 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.
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How Does Dave Foss’s Compensation Compare With Similar Sized Companies?
According to our data, Jack Henry & Associates, Inc. has a market capitalization of US$10b, and pays its CEO total annual compensation worth US$3.9m. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at US$675k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Most shareholders would consider it a positive that Dave Foss takes less compensation than the CEOs of most other large companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Jack Henry & Associates, below.
Is Jack Henry & Associates, Inc. Growing?
Jack Henry & Associates, Inc. has increased its earnings per share (EPS) by an average of 22% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 8.3%.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Jack Henry & Associates, Inc. Been A Good Investment?
I think that the total shareholder return of 70%, over three years, would leave most Jack Henry & Associates, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
It looks like Jack Henry & Associates, Inc. pays its CEO less than the average at large companies. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Dave Foss deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Jack Henry & Associates shares (free trial).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
