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What Can We Conclude About Mainfreight's (NZSE:MFT) CEO Pay?

Simply Wall St
·3 min read

The CEO of Mainfreight Limited (NZSE:MFT) is Don Braid, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Mainfreight

How Does Total Compensation For Don Braid Compare With Other Companies In The Industry?

Our data indicates that Mainfreight Limited has a market capitalization of NZ$6.0b, and total annual CEO compensation was reported as NZ$3.0m for the year to March 2020. That's just a smallish increase of 6.9% on last year. We note that the salary portion, which stands at NZ$2.20m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between NZ$2.9b and NZ$9.4b, we discovered that the median CEO total compensation of that group was NZ$3.7m. So it looks like Mainfreight compensates Don Braid in line with the median for the industry. Moreover, Don Braid also holds NZ$171m worth of Mainfreight stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

NZ$2.2m

NZ$2.1m

75%

Other

NZ$752k

NZ$661k

25%

Total Compensation

NZ$3.0m

NZ$2.8m

100%

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 9.3% of the pie. It's interesting to note that Mainfreight allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

Mainfreight Limited's Growth

Mainfreight Limited has seen its earnings per share (EPS) increase by 19% a year over the past three years. Its revenue is up 5.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Mainfreight Limited Been A Good Investment?

Boasting a total shareholder return of 168% over three years, Mainfreight Limited 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...

As we noted earlier, Mainfreight pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Mainfreight that investors should be aware of in a dynamic business environment.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.