Does Jacobs Engineering Group Inc.'s (NYSE:JEC) CEO Pay Reflect Performance?

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Steve Demetriou has been the CEO of Jacobs Engineering Group Inc. (NYSE:JEC) since 2015. This analysis aims first to contrast CEO compensation with other large 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.

View our latest analysis for Jacobs Engineering Group

How Does Steve Demetriou's Compensation Compare With Similar Sized Companies?

Our data indicates that Jacobs Engineering Group Inc. is worth US$11b, and total annual CEO compensation is US$13m. (This number is for the twelve months until September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Steve Demetriou is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Jacobs Engineering Group, below.

Is Jacobs Engineering Group Inc. Growing?

On average over the last three years, Jacobs Engineering Group Inc. has shrunk earnings per share by 5.3% each year (measured with a line of best fit). It achieved revenue growth of 76% over the last year.

The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has Jacobs Engineering Group Inc. Been A Good Investment?

Most shareholders would probably be pleased with Jacobs Engineering Group Inc. for providing a total return of 61% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Remuneration for Steve Demetriou is close enough to the median pay for a CEO of a large company .

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Jacobs Engineering Group shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.