There Could Be A Chance Jack Henry & Associates, Inc.'s (NASDAQ:JKHY) CEO Will Have Their Compensation Increased

Shareholders will be pleased by the robust performance of Jack Henry & Associates, Inc. (NASDAQ:JKHY) recently and this will be kept in mind in the upcoming AGM on 15 November 2022. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

Check out the opportunities and risks within the US IT industry.

How Does Total Compensation For Dave Foss Compare With Other Companies In The Industry?

Our data indicates that Jack Henry & Associates, Inc. has a market capitalization of US$13b, and total annual CEO compensation was reported as US$9.8m for the year to June 2022. That's a notable increase of 12% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$840k.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$16m. That is to say, Dave Foss is paid under the industry median. What's more, Dave Foss holds US$23m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	US$840k	US$840k	9%
Other	US$8.9m	US$7.9m	91%
Total Compensation	US$9.8m	US$8.7m	100%

Talking in terms of the industry, salary represented approximately 10% of total compensation out of all the companies we analyzed, while other remuneration made up 90% of the pie. Although there is a difference in how total compensation is set, Jack Henry & Associates more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Jack Henry & Associates, Inc.'s Growth Numbers

Over the past three years, Jack Henry & Associates, Inc. has seen its earnings per share (EPS) grow by 12% per year. In the last year, its revenue is up 11%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Jack Henry & Associates, Inc. Been A Good Investment?

With a total shareholder return of 27% over three years, Jack Henry & Associates, 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.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Jack Henry & Associates.

Important note: Jack Henry & Associates 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.