Stephen Berman has been the CEO of JAKKS Pacific, Inc. (NASDAQ:JAKK) since 2010, 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 JAKKS Pacific, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that JAKKS Pacific, Inc. has a market capitalization of US$21m, and reported total annual CEO compensation of US$3.9m for the year to December 2019. That's a notable increase of 13% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.6m.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$223k. This suggests that Stephen Berman is paid more than the median for the industry. Furthermore, Stephen Berman directly owns US$2.3m worth of shares in the company.
Talking in terms of the industry, salary represented approximately 26% of total compensation out of all the companies we analyzed, while other remuneration made up 74% of the pie. JAKKS Pacific pays out 40% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
JAKKS Pacific, Inc.'s Growth
JAKKS Pacific, Inc. has seen its earnings per share (EPS) increase by 44% a year over the past three years. In the last year, its revenue is down 6.7%.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has JAKKS Pacific, Inc. Been A Good Investment?
Given the total shareholder loss of 82% over three years, many shareholders in JAKKS Pacific, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Stephen is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say Stephen is underpaid, in fact compensation is definitely on the higher side.
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 3 warning signs for JAKKS Pacific 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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