Yahoo Finance Is McMillan Shakespeare Limited’s (ASX:MMS) CEO Paid Enough To Stay Motivated?
Mike Salisbury became the CEO of McMillan Shakespeare Limited (ASX:MMS) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for McMillan Shakespeare
How Does Mike Salisbury’s Compensation Compare With Similar Sized Companies?
According to our data, McMillan Shakespeare Limited has a market capitalization of AU$1.3b, and pays its CEO total annual compensation worth AU$1m. We note that’s an increase of 35% above last year. We examined companies with market caps from AU$566m to AU$2.3b, and discovered that the median CEO compensation of that group was AU$449k.
It would therefore appear that McMillan Shakespeare Limited pays Mike Salisbury 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 McMillan Shakespeare has changed from year to year.
Is McMillan Shakespeare Limited Growing?
Over the last three years McMillan Shakespeare Limited has shrunk its earnings per share by an average of 11% per year. Its revenue is up 4.2% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
You might want to check this free visual report on analyst forecasts for future earnings.
Has McMillan Shakespeare Limited Been A Good Investment?
I think that the total shareholder return of 47%, over three years, would leave most McMillan Shakespeare Limited shareholders smiling. 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 compared total CEO remuneration at McMillan Shakespeare Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
On the other hand, returns have been good, so the company is doing something right. So on this analysis we’d stop short of criticizing the level of CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling McMillan Shakespeare Limited shares (free trial).
Or you might prefer examine intently this intuitive graph showing past 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.
