Is Juniper Networks, Inc.'s (NYSE:JNPR) CEO Paid Enough Relative To Peers?

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Rami Rahim became the CEO of Juniper Networks, Inc. (NYSE:JNPR) in 2014. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Juniper Networks

How Does Rami Rahim's Compensation Compare With Similar Sized Companies?

Our data indicates that Juniper Networks, Inc. is worth US$9.7b, and total annual CEO compensation is US$10.0m. (This is based on the year to December 2018). That's a modest increase of 5.9% on the prior year year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

That means Rami Rahim receives fairly typical remuneration for the CEO of a large company. 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 Juniper Networks has changed from year to year.

Is Juniper Networks, Inc. Growing?

On average over the last three years, Juniper Networks, Inc. has shrunk earnings per share by 17% each year (measured with a line of best fit). It saw its revenue drop -6.6% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Juniper Networks, Inc. Been A Good Investment?

Juniper Networks, Inc. has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Rami Rahim is paid around the same as most CEOs of large companies.

We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We wouldn't say the CEO pay is too high, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Shareholders may want to check for free if Juniper Networks insiders are buying or selling shares.

Important note: Juniper Networks 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.