Yahoo Finance Why We Think Maximus, Inc.'s (NYSE:MMS) CEO Compensation Is Not Excessive At All
Key Insights
Maximus' Annual General Meeting to take place on 14th of March
Total pay for CEO Bruce Caswell includes US$823.1k salary
The overall pay is 32% below the industry average
Maximus' EPS declined by 6.1% over the past three years while total shareholder return over the past three years was 38%
Shareholders may be wondering what CEO Bruce Caswell plans to do to improve the less than great performance at Maximus, Inc. (NYSE:MMS) recently. At the next AGM coming up on 14th of March, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
View our latest analysis for Maximus
How Does Total Compensation For Bruce Caswell Compare With Other Companies In The Industry?
According to our data, Maximus, Inc. has a market capitalization of US$4.9b, and paid its CEO total annual compensation worth US$6.3m over the year to September 2022. That's a notable decrease of 20% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$823k.
For comparison, other companies in the American IT industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$9.2m. This suggests that Bruce Caswell is paid below the industry median. What's more, Bruce Caswell holds US$17m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$823k | US$754k | 13% |
Other | US$5.5m | US$7.2m | 87% |
Total Compensation | US$6.3m | US$7.9m | 100% |
On an industry level, around 10% of total compensation represents salary and 90% is other remuneration. Maximus is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Maximus, Inc.'s Growth Numbers
Over the last three years, Maximus, Inc. has shrunk its earnings per share by 6.1% per year. It achieved revenue growth of 6.0% over the last year.
Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Maximus, Inc. Been A Good Investment?
Boasting a total shareholder return of 38% over three years, Maximus, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is potentially serious) in Maximus we think you should know about.
Switching gears from Maximus, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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