Yahoo Finance Here's What We Think About MGC Pharmaceuticals' (ASX:MXC) CEO Pay
Roby Zomer has been the CEO of MGC Pharmaceuticals Limited (ASX:MXC) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for MGC Pharmaceuticals.
Check out our latest analysis for MGC Pharmaceuticals
How Does Total Compensation For Roby Zomer Compare With Other Companies In The Industry?
At the time of writing, our data shows that MGC Pharmaceuticals Limited has a market capitalization of AU$46m, and reported total annual CEO compensation of AU$440k for the year to June 2020. We note that's a decrease of 11% compared to last year. Notably, the salary which is AU$290.3k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below AU$262m, reported a median total CEO compensation of AU$412k. From this we gather that Roby Zomer is paid around the median for CEOs in the industry. Furthermore, Roby Zomer directly owns AU$858k worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$290k | AU$330k | 66% |
Other | AU$150k | AU$165k | 34% |
Total Compensation | AU$440k | AU$495k | 100% |
Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. MGC Pharmaceuticals is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at MGC Pharmaceuticals Limited's Growth Numbers
MGC Pharmaceuticals Limited's earnings per share (EPS) grew 2.4% per year over the last three years. Its revenue is up 213% over the last year.
It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has MGC Pharmaceuticals Limited Been A Good Investment?
Given the total shareholder loss of 72% over three years, many shareholders in MGC Pharmaceuticals Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, MGC Pharmaceuticals pays its CEO in line with similar-sized companies belonging to the same industry. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Roby deserves a raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 6 warning signs for MGC Pharmaceuticals (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
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.
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. 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.
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