Yahoo Finance Why We Think Multistack International Limited's (ASX:MSI) CEO Compensation Is Not Excessive At All
The performance at Multistack International Limited (ASX:MSI) has been rather lacklustre of late and shareholders may be wondering what CEO Stephen Leung is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 26 May 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.
View our latest analysis for Multistack International
How Does Total Compensation For Stephen Leung Compare With Other Companies In The Industry?
According to our data, Multistack International Limited has a market capitalization of AU$9.0m, and paid its CEO total annual compensation worth AU$81k over the year to December 2020. That's slightly lower by 3.7% over the previous year. Notably, the salary of AU$81k is the entirety of the CEO compensation.
In comparison with other companies in the industry with market capitalizations under AU$257m, the reported median total CEO compensation was AU$495k. In other words, Multistack International pays its CEO lower than the industry median. What's more, Stephen Leung holds AU$2.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$81k | AU$85k | 100% |
Other | - | - | - |
Total Compensation | AU$81k | AU$85k | 100% |
Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. On a company level, Multistack International prefers to reward its CEO through a salary, opting not to pay Stephen Leung through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Multistack International Limited's Growth Numbers
Multistack International Limited has reduced its earnings per share by 23% a year over the last three years. In the last year, its revenue is up 7.3%.
The decline in EPS is a bit concerning. 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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Multistack International Limited Been A Good Investment?
We think that the total shareholder return of 1,250%, over three years, would leave most Multistack International Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Multistack International rewards its CEO solely through a salary, ignoring non-salary benefits completely. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 3 which shouldn't be ignored) in Multistack International we think you should know about.
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. 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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