Bradley Jacobs became the CEO of XPO Logistics, Inc. (NYSE:XPO) in 2011. 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 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 Bradley Jacobs’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that XPO Logistics, Inc. has a market cap of US$6.2b, and is paying total annual CEO compensation of US$13m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$625k. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.8m.
It would therefore appear that XPO Logistics, Inc. pays Bradley Jacobs 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.
You can see a visual representation of the CEO compensation at XPO Logistics, below.
Is XPO Logistics, Inc. Growing?
XPO Logistics, Inc. has increased its earnings per share (EPS) by an average of 71% a year, over the last three years (using a line of best fit). Its revenue is up 2.7% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.
Has XPO Logistics, Inc. Been A Good Investment?
I think that the total shareholder return of 88%, over three years, would leave most XPO Logistics, Inc. shareholders smiling. 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 total CEO remuneration at XPO Logistics, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying XPO Logistics shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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