Greg Garrabrants has been the CEO of Axos Financial, Inc. (NYSE:AX) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Axos Financial.
How Does Total Compensation For Greg Garrabrants Compare With Other Companies In The Industry?
Our data indicates that Axos Financial, Inc. has a market capitalization of US$1.5b, and total annual CEO compensation was reported as US$4.9m for the year to June 2020. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$700k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$3.5m. Hence, we can conclude that Greg Garrabrants is remunerated higher than the industry median. What's more, Greg Garrabrants holds US$38m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. Axos Financial sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Axos Financial, Inc.'s Growth Numbers
Over the past three years, Axos Financial, Inc. has seen its earnings per share (EPS) grow by 13% per year. Its revenue is up 16% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Axos Financial, Inc. Been A Good Investment?
Since shareholders would have lost about 9.0% over three years, some Axos Financial, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Greg is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company has impressed with its EPS growth, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Axos Financial that you should be aware of before investing.
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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