Yahoo Finance Here's Why We Think MPower Group Limited's (ASX:MPR) CEO Compensation Looks Fair
The performance at MPower Group Limited (ASX:MPR) has been rather lacklustre of late and shareholders may be wondering what CEO Nathan Wise is planning to do about this. At the next AGM coming up on 24 November 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.
Check out our latest analysis for MPower Group
How Does Total Compensation For Nathan Wise Compare With Other Companies In The Industry?
Our data indicates that MPower Group Limited has a market capitalization of AU$13m, and total annual CEO compensation was reported as AU$401k for the year to June 2021. That's a notable increase of 11% on last year. In particular, the salary of AU$369.5k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$275m, reported a median total CEO compensation of AU$592k. In other words, MPower Group pays its CEO lower than the industry median.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$369k | AU$356k | 92% |
Other | AU$32k | AU$4.3k | 8% |
Total Compensation | AU$401k | AU$360k | 100% |
On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. MPower Group pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at MPower Group Limited's Growth Numbers
MPower Group Limited's earnings per share (EPS) grew 37% per year over the last three years. It achieved revenue growth of 1.7% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has MPower Group Limited Been A Good Investment?
Given the total shareholder loss of 9.3% over three years, many shareholders in MPower Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Despite the strong EPS growth recently, the share price has not performed to expectations and it suggests that other factors might be driving it, apart from fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.
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 MPower Group (of which 4 are concerning!) 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. 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.
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