Yahoo Finance Shareholders Will Probably Be Cautious Of Increasing MCS Services Limited's (ASX:MSG) CEO Compensation At The Moment
Key Insights
MCS Services' Annual General Meeting to take place on 30th of November
Salary of AU$196.4k is part of CEO Paul Simmons's total remuneration
The overall pay is 43% below the industry average
Over the past three years, MCS Services' EPS fell by 71% and over the past three years, the total loss to shareholders 38%
The underwhelming performance at MCS Services Limited (ASX:MSG) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 30th of November. The data we gathered below shows that CEO compensation looks acceptable for now.
View our latest analysis for MCS Services
How Does Total Compensation For Paul Simmons Compare With Other Companies In The Industry?
At the time of writing, our data shows that MCS Services Limited has a market capitalization of AU$4.0m, and reported total annual CEO compensation of AU$252k for the year to June 2023. We note that's a small decrease of 4.8% on last year. Notably, the salary which is AU$196.4k, represents most of the total compensation being paid.
In comparison with other companies in the Australian Commercial Services industry with market capitalizations under AU$305m, the reported median total CEO compensation was AU$442k. That is to say, Paul Simmons is paid under the industry median. Moreover, Paul Simmons also holds AU$761k worth of MCS Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$196k | AU$200k | 78% |
Other | AU$56k | AU$65k | 22% |
Total Compensation | AU$252k | AU$265k | 100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. According to our research, MCS Services has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at MCS Services Limited's Growth Numbers
Over the last three years, MCS Services Limited has shrunk its earnings per share by 71% per year. It saw its revenue drop 12% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has MCS Services Limited Been A Good Investment?
Few MCS Services Limited shareholders would feel satisfied with the return of -38% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for MCS Services that you should be aware of before investing.
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.
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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.
