Shareholders May Not Be So Generous With H&R Block, Inc.'s (NYSE:HRB) CEO Compensation And Here's Why

By
Simply Wall St
Published
September 03, 2021
NYSE:HRB
Source: Shutterstock

Under the guidance of CEO Jeff Jones, H&R Block, Inc. (NYSE:HRB) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 09 September 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for H&R Block

Comparing H&R Block, Inc.'s CEO Compensation With the industry

According to our data, H&R Block, Inc. has a market capitalization of US$4.7b, and paid its CEO total annual compensation worth US$8.9m over the year to April 2021. Notably, that's an increase of 29% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$998k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$3.4m. This suggests that Jeff Jones is paid more than the median for the industry. Furthermore, Jeff Jones directly owns US$13m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20212020Proportion (2021)
Salary US$998k US$1.0m 11%
Other US$7.9m US$5.9m 89%
Total CompensationUS$8.9m US$6.9m100%

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. In H&R Block's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NYSE:HRB CEO Compensation September 3rd 2021

A Look at H&R Block, Inc.'s Growth Numbers

Over the past three years, H&R Block, Inc. has seen its earnings per share (EPS) grow by 1.2% per year. In the last year, its revenue is down 4.8%.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 H&R Block, Inc. Been A Good Investment?

H&R Block, Inc. has served shareholders reasonably well, with a total return of 15% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for H&R Block you should be aware of, and 3 of them can't be ignored.

Important note: H&R Block 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. 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.
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