François Locoh-Donou has been the CEO of F5 Networks, Inc. (NASDAQ:FFIV) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does François Locoh-Donou's Compensation Compare With Similar Sized Companies?
According to our data, F5 Networks, Inc. has a market capitalization of US$8.8b, and paid its CEO total annual compensation worth US$6.9m over the year to September 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$810k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.7m.
That means François Locoh-Donou receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at F5 Networks, below.
Is F5 Networks, Inc. Growing?
Over the last three years F5 Networks, Inc. has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). Its revenue is up 3.7% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has F5 Networks, Inc. Been A Good Investment?
With a total shareholder return of 2.4% over three years, F5 Networks, Inc. has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
François Locoh-Donou is paid around what is normal the leaders of comparable size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying F5 Networks shares with their own money (free access).
If you want to buy a stock that is better than F5 Networks, 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.