Under the guidance of CEO Frederick Smith, FedEx Corporation (NYSE:FDX) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27 September 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
Comparing FedEx Corporation's CEO Compensation With the industry
Our data indicates that FedEx Corporation has a market capitalization of US$68b, and total annual CEO compensation was reported as US$14m for the year to May 2021. Notably, that's an increase of 29% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$966k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$4.9m. Accordingly, our analysis reveals that FedEx Corporation pays Frederick Smith north of the industry median. What's more, Frederick Smith holds US$4.9b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. It's interesting to note that FedEx allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at FedEx Corporation's Growth Numbers
FedEx Corporation has seen its earnings per share (EPS) increase by 5.0% a year over the past three years. In the last year, its revenue is up 21%.
This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. 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 FedEx Corporation Been A Good Investment?
FedEx Corporation has not done too badly by shareholders, with a total return of 7.2%, over three years. It would be nice to see that metric improve in the future. 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.
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. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for FedEx that investors should look into moving forward.
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.
If you decide to trade FedEx, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.