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Why Axos Financial, Inc.’s (NYSE:AX) CEO Pay Matters To You

Greg Garrabrants has been the CEO of Axos Financial, Inc. (NYSE:AX) since 2007. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Axos Financial

How Does Greg Garrabrants’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Axos Financial, Inc. has a market cap of US$1.8b, and is paying total annual CEO compensation of US$27m. (This number is for the twelve months until 2018). We note that’s an increase of 305% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$700k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.6m.

It would therefore appear that Axos Financial, Inc. pays Greg Garrabrants more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Axos Financial has changed from year to year.

NYSE:AX CEO Compensation December 19th 18
NYSE:AX CEO Compensation December 19th 18

Is Axos Financial, Inc. Growing?

On average over the last three years, Axos Financial, Inc. has grown earnings per share (EPS) by 16% each year. In the last year, its revenue is up 11%.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Axos Financial, Inc. Been A Good Investment?

Axos Financial, Inc. has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We compared the total CEO remuneration paid by Axos Financial, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven’t been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Axos Financial (free visualization of insider trades).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow 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.

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