The CEO Of Jack in the Box Inc. (NASDAQ:JACK) Might See A Pay Rise On The Horizon

Key Insights

• Jack in the Box to hold its Annual General Meeting on 3rd of March
• CEO Darin Harris' total compensation includes salary of US$869.2k
• The overall pay is 38% below the industry average
• Jack in the Box's EPS grew by 17% over the past three years while total shareholder return over the past three years was 21%

The decent performance at Jack in the Box Inc. (NASDAQ:JACK) recently will please most shareholders as they go into the AGM coming up on 3rd of March. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Jack in the Box

How Does Total Compensation For Darin Harris Compare With Other Companies In The Industry?

According to our data, Jack in the Box Inc. has a market capitalization of US$1.6b, and paid its CEO total annual compensation worth US$4.6m over the year to October 2022. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$869k.

On examining similar-sized companies in the American Hospitality industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$7.4m. In other words, Jack in the Box pays its CEO lower than the industry median. Furthermore, Darin Harris directly owns US$741k worth of shares in the company.

Component	2022	2021	Proportion (2022)
Salary	US$869k	US$841k	19%
Other	US$3.8m	US$3.9m	81%
Total Compensation	US$4.6m	US$4.7m	100%

Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. It's interesting to note that Jack in the Box pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Jack in the Box Inc.'s Growth

Jack in the Box Inc. has seen its earnings per share (EPS) increase by 17% a year over the past three years. In the last year, its revenue is up 28%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Jack in the Box Inc. Been A Good Investment?

With a total shareholder return of 21% over three years, Jack in the Box Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Jack in the Box you should be aware of, and 1 of them can't be ignored.

Important note: Jack in the Box 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.