Is Hub Group, Inc.’s (NASDAQ:HUBG) CEO Overpaid Relative To Its Peers?

In 1995 David Yeager was appointed CEO of Hub Group, Inc. (NASDAQ:HUBG). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

View our latest analysis for Hub Group

How Does David Yeager’s Compensation Compare With Similar Sized Companies?

Our data indicates that Hub Group, Inc. is worth US$1.5b, and total annual CEO compensation is US$2.8m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$860k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.5m.

So David Yeager is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Hub Group has changed from year to year.

NasdaqGS:HUBG CEO Compensation, March 20th 2019
NasdaqGS:HUBG CEO Compensation, March 20th 2019

Is Hub Group, Inc. Growing?

Hub Group, Inc. has increased its earnings per share (EPS) by an average of 29% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 18%.

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. You might want to check this free visual report on analyst forecasts for future earnings.

Has Hub Group, Inc. Been A Good Investment?

Hub Group, Inc. has not done too badly by shareholders, with a total return of 6.6%, over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

David Yeager is paid around what is normal the leaders of comparable size companies.

The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. Shareholders may want to check for free if Hub Group insiders are buying or selling shares.

Important note: Hub Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.