Is Expeditors International of Washington, Inc. (NASDAQ:EXPD) Excessively Paying Its CEO?

Jeff Musser has been the CEO of Expeditors International of Washington, Inc. (NASDAQ:EXPD) 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. This process should give us an idea about how appropriately the CEO is paid.

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How Does Jeff Musser’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Expeditors International of Washington, Inc. has a market cap of US$12b, and is paying total annual CEO compensation of US$6.3m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$100k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).

Most shareholders would consider it a positive that Jeff Musser takes less compensation than the CEOs of most other large companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Expeditors International of Washington has changed from year to year.

NasdaqGS:EXPD CEO Compensation January 16th 19
NasdaqGS:EXPD CEO Compensation January 16th 19

Is Expeditors International of Washington, Inc. Growing?

Expeditors International of Washington, Inc. has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). It achieved revenue growth of 17% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Expeditors International of Washington, Inc. Been A Good Investment?

I think that the total shareholder return of 69%, over three years, would leave most Expeditors International of Washington, Inc. shareholders smiling. 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.

In Summary…

Expeditors International of Washington, Inc. is currently paying its CEO below what is normal for large companies. Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Jeff Musser deserves a raise!

It’s not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Expeditors International of Washington shares with their own money (free access).

Or you might prefer examine intently this intuitive graph showing past earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.