Key Insights
- Arista Networks will host its Annual General Meeting on 30th of May
- CEO Jayshree Ullal's total compensation includes salary of US$300.0k
- The total compensation is 36% less than the average for the industry
- Over the past three years, Arista Networks' EPS grew by 47% and over the past three years, the total shareholder return was 257%
The solid performance at Arista Networks Inc (NYSE:ANET) has been impressive and shareholders will probably be pleased to know that CEO Jayshree Ullal has delivered. At the upcoming AGM on 30th of May, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.
See our latest analysis for Arista Networks
How Does Total Compensation For Jayshree Ullal Compare With Other Companies In The Industry?
At the time of writing, our data shows that Arista Networks Inc has a market capitalization of US$116b, and reported total annual CEO compensation of US$8.9m for the year to December 2024. That's a notable decrease of 42% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$300k.
On comparing similar companies in the American Communications industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. That is to say, Jayshree Ullal is paid under the industry median. Moreover, Jayshree Ullal also holds US$3.5b worth of Arista Networks stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$300k | US$300k | 3% |
| Other | US$8.6m | US$15m | 97% |
| Total Compensation | US$8.9m | US$16m | 100% |
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Arista Networks has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Arista Networks Inc's Growth Numbers
Over the past three years, Arista Networks Inc has seen its earnings per share (EPS) grow by 47% per year. It achieved revenue growth of 22% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Arista Networks Inc Been A Good Investment?
Boasting a total shareholder return of 257% over three years, Arista Networks Inc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Arista Networks primarily uses non-salary benefits to reward its CEO. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Arista Networks that investors should be aware of in a dynamic business environment.
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.
Valuation is complex, but we're here to simplify it.
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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.