Yahoo Finance Should You Worry About Arista Networks, Inc.’s (NYSE:ANET) CEO Pay?
Jayshree Ullal has been the CEO of Arista Networks, Inc. (NYSE:ANET) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Arista Networks
How Does Jayshree Ullal’s Compensation Compare With Similar Sized Companies?
Our data indicates that Arista Networks, Inc. is worth US$15b, and total annual CEO compensation is US$7.9m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$300k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was 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 Jayshree Ullal receives fairly typical remuneration for the CEO of a large company. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Arista Networks has changed from year to year.
Is Arista Networks, Inc. Growing?
Arista Networks, Inc. has increased its earnings per share (EPS) by an average of 35% a year, over the last three years (using a line of best fit). Its revenue is up 34% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Arista Networks, Inc. Been A Good Investment?
I think that the total shareholder return of 216%, over three years, would leave most Arista Networks, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary…
Jayshree Ullal is paid around the same as most CEOs of large companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if Arista Networks 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 editorial-team@simplywallst.com.
