In 2014 Lenny Comma was appointed CEO of Jack in the Box Inc. (NASDAQ:JACK). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Lenny Comma's Compensation Compare With Similar Sized Companies?
Our data indicates that Jack in the Box Inc. is worth US$2.2b, and total annual CEO compensation was reported as US$5.0m for the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at US$920k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.
So Lenny Comma is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Jack in the Box has changed over time.
Is Jack in the Box Inc. Growing?
Over the last three years Jack in the Box Inc. has grown its earnings per share (EPS) by an average of 4.2% per year (using a line of best fit). In the last year, its revenue is down 2.0%.
I generally like to see a little revenue growth, but I'm happy with the EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Jack in the Box Inc. Been A Good Investment?
Since shareholders would have lost about 7.9% over three years, some Jack in the Box Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Lenny Comma is paid around the same as most CEOs of similar size companies.
The company cannot boast particularly strong per share growth. And shareholder returns have been disappointing over the last three years. So suffice it to say we don't think the compensation is modest. So you may want to check if insiders are buying Jack in the Box shares with their own money (free access).
If you want to buy a stock that is better than Jack in the Box, this free list of high return, low debt companies is a great place to look.
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