Jumbo Interactive Limited's (ASX:JIN) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Jumbo Interactive's Annual General Meeting to take place on 9th of November
• CEO Mike Veverka's total compensation includes salary of AU$769.8k
• The overall pay is comparable to the industry average
• Jumbo Interactive's total shareholder return over the past three years was 28% while its EPS grew by 6.5% over the past three years

Under the guidance of CEO Mike Veverka, Jumbo Interactive Limited (ASX:JIN) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 9th of November. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Jumbo Interactive

How Does Total Compensation For Mike Veverka Compare With Other Companies In The Industry?

At the time of writing, our data shows that Jumbo Interactive Limited has a market capitalization of AU$864m, and reported total annual CEO compensation of AU$1.3m for the year to June 2023. That's a notable decrease of 11% on last year. We note that the salary of AU$769.8k makes up a sizeable portion of the total compensation received by the CEO.

On comparing similar companies from the Australian Hospitality industry with market caps ranging from AU$315m to AU$1.3b, we found that the median CEO total compensation was AU$1.3m. This suggests that Jumbo Interactive remunerates its CEO largely in line with the industry average. Moreover, Mike Veverka also holds AU$9.3m worth of Jumbo Interactive stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$770k	AU$821k	57%
Other	AU$579k	AU$697k	43%
Total Compensation	AU$1.3m	AU$1.5m	100%

On an industry level, roughly 57% of total compensation represents salary and 43% is other remuneration. Jumbo Interactive is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Jumbo Interactive Limited's Growth

Jumbo Interactive Limited has seen its earnings per share (EPS) increase by 6.5% a year over the past three years. In the last year, its revenue is up 14%.

We would argue that the modest growth in revenue is a notable positive. And the modest growth in EPS isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 Jumbo Interactive Limited Been A Good Investment?

Jumbo Interactive Limited has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Jumbo Interactive that investors should think about before committing capital to this stock.

Switching gears from Jumbo Interactive, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.