How Does CBIZ's (NYSE:CBZ) CEO Pay Compare With Company Performance?

By
Simply Wall St
Published
November 29, 2020
NYSE:CBZ

This article will reflect on the compensation paid to Jerome Grisko who has served as CEO of CBIZ, Inc. (NYSE:CBZ) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for CBIZ

How Does Total Compensation For Jerome Grisko Compare With Other Companies In The Industry?

At the time of writing, our data shows that CBIZ, Inc. has a market capitalization of US$1.3b, and reported total annual CEO compensation of US$3.8m for the year to December 2019. We note that's a small decrease of 6.0% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$866k.

On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$2.0m. This suggests that Jerome Grisko is paid more than the median for the industry. What's more, Jerome Grisko holds US$18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20192018Proportion (2019)
Salary US$866k US$791k 22%
Other US$3.0m US$3.3m 78%
Total CompensationUS$3.8m US$4.1m100%

On an industry level, around 21% of total compensation represents salary and 79% is other remuneration. CBIZ is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:CBZ CEO Compensation November 29th 2020

A Look at CBIZ, Inc.'s Growth Numbers

CBIZ, Inc. has seen its earnings per share (EPS) increase by 19% a year over the past three years. In the last year, its revenue is up 1.2%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 CBIZ, Inc. Been A Good Investment?

Boasting a total shareholder return of 68% over three years, CBIZ, Inc. has done well by shareholders. 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.

To Conclude...

As we noted earlier, CBIZ pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, CBIZ has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Jerome deserves a raise!

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for CBIZ that investors should be aware of in a dynamic business environment.

Important note: CBIZ is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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