This Is Why Shareholders Will Hold Back On A Pay Rise For Expeditors International of Washington, Inc.'s (NYSE:EXPD) CEO This Year

Key Insights

• Expeditors International of Washington to hold its Annual General Meeting on 7th of May
• Salary of US$100.0k is part of CEO Jeff Musser's total remuneration
• The overall pay is comparable to the industry average
• Expeditors International of Washington's EPS grew by 8.7% over the past three years while total shareholder return over the past three years was 1.1%

Performance at Expeditors International of Washington, Inc. (NYSE:EXPD) has been reasonably good and CEO Jeff Musser has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 7th of May. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Expeditors International of Washington

How Does Total Compensation For Jeff Musser Compare With Other Companies In The Industry?

Our data indicates that Expeditors International of Washington, Inc. has a market capitalization of US$16b, and total annual CEO compensation was reported as US$7.5m for the year to December 2023. That's a notable decrease of 31% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$100k.

In comparison with other companies in the American Logistics industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$6.0m. This suggests that Expeditors International of Washington remunerates its CEO largely in line with the industry average. What's more, Jeff Musser holds US$27m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$100k	US$100k	1%
Other	US$7.4m	US$11m	99%
Total Compensation	US$7.5m	US$11m	100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but Expeditors International of Washington paid Jeff Musser a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Expeditors International of Washington, Inc.'s Growth

Over the past three years, Expeditors International of Washington, Inc. has seen its earnings per share (EPS) grow by 8.7% per year. Its revenue is down 46% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

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

Expeditors International of Washington, Inc. has generated a total shareholder return of 1.1% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Expeditors International of Washington primarily uses non-salary benefits to reward its CEO. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Expeditors International of Washington that you should be aware of before investing.

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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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.