Yahoo Finance This Is Why We Think Jack in the Box Inc.'s (NASDAQ:JACK) CEO Might Get A Pay Rise Approved By Shareholders
Key Insights
Jack in the Box's Annual General Meeting to take place on 3rd of March
Salary of US$869.2k is part of CEO Darin Harris's total remuneration
Total compensation is 38% below industry average
Jack in the Box's EPS grew by 17% over the past three years while total shareholder return over the past three years was 21%
Shareholders will be pleased by the robust performance of Jack in the Box Inc. (NASDAQ:JACK) recently and this will be kept in mind in the upcoming AGM on 3rd of March. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
See our latest analysis for Jack in the Box
Comparing Jack in the Box Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Jack in the Box Inc. has a market capitalization of US$1.6b, and reported total annual CEO compensation of US$4.6m for the year to October 2022. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$869k.
In comparison with other companies in the American Hospitality industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$7.4m. In other words, Jack in the Box pays its CEO lower than the industry median. What's more, Darin Harris holds US$741k worth of shares in the company in their own name.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$869k | US$841k | 19% |
Other | US$3.8m | US$3.9m | 81% |
Total Compensation | US$4.6m | US$4.7m | 100% |
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Jack in the Box pays out 19% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Jack in the Box Inc.'s Growth
Over the past three years, Jack in the Box Inc. has seen its earnings per share (EPS) grow by 17% per year. Its revenue is up 28% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Jack in the Box Inc. Been A Good Investment?
Jack in the Box Inc. has served shareholders reasonably well, with a total return of 21% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Jack in the Box (1 can't be ignored!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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