Christian Ulbrich has been the CEO of Jones Lang LaSalle Incorporated (NYSE:JLL) since 2016, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Jones Lang LaSalle Incorporated’s CEO Compensation With the industry
Our data indicates that Jones Lang LaSalle Incorporated has a market capitalization of US$5.3b, and total annual CEO compensation was reported as US$9.3m for the year to December 2019. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$1.3m. This suggests that Christian Ulbrich is paid more than the median for the industry. Moreover, Christian Ulbrich also holds US$6.7m worth of Jones Lang LaSalle stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 32% of total compensation out of all the companies we analyzed, while other remuneration made up 68% of the pie. Jones Lang LaSalle sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Jones Lang LaSalle Incorporated’s Growth Numbers
Over the past three years, Jones Lang LaSalle Incorporated has seen its earnings per share (EPS) grow by 5.6% per year. Its revenue is up 4.6% over the last year.
We would argue that the improvement in revenue is good, but isn’t particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Historical performance can sometimes be a good indicator on what’s coming up next but if you want to peer into the company’s future you might be interested in this free visualization of analyst forecasts.
Has Jones Lang LaSalle Incorporated Been A Good Investment?
Given the total shareholder loss of 15% over three years, many shareholders in Jones Lang LaSalle Incorporated are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Christian is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Jones Lang LaSalle have arguably been worse, over the last three years. And the situation doesn’t look all that good when you see Christian is remunerated higher than the industry average. All things considered, we believe shareholders would be disappointed to see Christian’s compensation grow without first seeing an improvement in the performance of the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That’s why we did some digging and identified 2 warning signs for Jones Lang LaSalle that investors should think about before committing capital to this stock.
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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This article by Simply Wall St is general in nature. 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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