Greg Garrabrants has been the CEO of Axos Financial, Inc. (NYSE:AX) since 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Greg Garrabrants’s Compensation Compare With Similar Sized Companies?
Our data indicates that Axos Financial, Inc. is worth US$1.7b, and total annual CEO compensation is US$27m. (This figure is for the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$700k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.1m.
As you can see, Greg Garrabrants is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Axos Financial, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Axos Financial has changed over time.
Is Axos Financial, Inc. Growing?
Over the last three years Axos Financial, Inc. has grown its earnings per share (EPS) by an average of 11% per year (using a line of best fit). It achieved revenue growth of 12% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
Has Axos Financial, Inc. Been A Good Investment?
Boasting a total shareholder return of 39% over three years, Axos Financial, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
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. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Axos Financial.
If you want to buy a stock that is better than Axos Financial, this free list of high return, low debt companies is a great place to look.
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