In 2015 Steve Demetriou was appointed CEO of Jacobs Engineering Group Inc. (NYSE:JEC). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Jacobs Engineering Group
How Does Steve Demetriou’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Jacobs Engineering Group Inc. has a market cap of US$8.2b, and is paying total annual CEO compensation of US$13m. (This number is for the twelve months until 2018). Notably, that’s an increase of 17% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO compensation was US$7.0m.
It would therefore appear that Jacobs Engineering Group Inc. pays Steve Demetriou more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Jacobs Engineering Group has changed from year to year.
Is Jacobs Engineering Group Inc. Growing?
On average over the last three years, Jacobs Engineering Group Inc. has shrunk earnings per share by 5.5% each year. In the last year, its revenue is up 50%.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Jacobs Engineering Group Inc. Been A Good Investment?
Most shareholders would probably be pleased with Jacobs Engineering Group Inc. for providing a total return of 56% over three years. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
We examined the amount Jacobs Engineering Group Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Jacobs Engineering Group insiders are buying or selling shares.
Or you might rather take a peek at this analytical visualization of historic cash flow, 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 [email protected].