Rami Rahim has been the CEO of Juniper Networks, Inc. (NYSE:JNPR) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Rami Rahim’s Compensation Compare With Similar Sized Companies?
Our data indicates that Juniper Networks, Inc. is worth US$9.8b, and total annual CEO compensation is US$9.4m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Rami Rahim is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Juniper Networks has changed over time.
Is Juniper Networks, Inc. Growing?
Juniper Networks, Inc. has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -7.6%.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Juniper Networks, Inc. Been A Good Investment?
Juniper Networks, Inc. has served shareholders reasonably well, with a total return of 27% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Rami Rahim is paid around the same as most CEOs of large companies.
The company isn’t growing earnings per share, and nor have the total returns inspired us. We do not think the CEO pay is a problem, but it’s probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Juniper Networks (free visualization of insider trades).
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.
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