Mark Mondello became the CEO of Jabil Inc. (NYSE:JBL) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Jabil pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Mark Mondello Compare With Other Companies In The Industry?
At the time of writing, our data shows that Jabil Inc. has a market capitalization of US$6.6b, and reported total annual CEO compensation of US$13m for the year to August 2020. That's a notable increase of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.4m. This suggests that Mark Mondello is paid more than the median for the industry. What's more, Mark Mondello holds US$94m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 34% of total compensation represents salary and 66% is other remuneration. It's interesting to note that Jabil allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Jabil Inc.'s Growth
Over the past three years, Jabil Inc. has seen its earnings per share (EPS) grow by 34% per year. In the last year, its revenue is up 5.0%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Jabil Inc. Been A Good Investment?
Boasting a total shareholder return of 66% over three years, Jabil Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we noted earlier, Jabil pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Mark deserves a raise!
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Jabil that investors should think about before committing capital to this stock.
Switching gears from Jabil, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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