Yahoo Finance MyState Limited's (ASX:MYS) CEO Compensation Looks Acceptable To Us And Here's Why
The share price of MyState Limited (ASX:MYS) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 19 October 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
Check out our latest analysis for MyState
How Does Total Compensation For Melos Sulicich Compare With Other Companies In The Industry?
According to our data, MyState Limited has a market capitalization of AU$538m, and paid its CEO total annual compensation worth AU$1.1m over the year to June 2021. That's a notable increase of 53% on last year. In particular, the salary of AU$623.1k, makes up a fairly large portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations ranging from AU$272m to AU$1.1b, the reported median CEO total compensation was AU$1.3m. From this we gather that Melos Sulicich is paid around the median for CEOs in the industry. Furthermore, Melos Sulicich directly owns AU$737k worth of shares in the company.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$623k | AU$600k | 57% |
Other | AU$463k | AU$108k | 43% |
Total Compensation | AU$1.1m | AU$708k | 100% |
Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. There isn't a significant difference between MyState and the broader market, in terms of salary allocation in the overall compensation package. 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 MyState Limited's Growth Numbers
Earnings per share at MyState Limited are much the same as they were three years ago, albeit slightly lower. In the last year, its revenue is up 13%.
Its a bit disappointing to see that the company has failed to grow its EPS. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has MyState Limited Been A Good Investment?
With a total shareholder return of 23% over three years, MyState Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for MyState (1 is concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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