We Discuss Why Maximus, Inc.'s (NYSE:MMS) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year
Key Insights
Maximus to hold its Annual General Meeting on 12th of March
Total pay for CEO Bruce Caswell includes US$850.0k salary
The overall pay is comparable to the industry average
Maximus' EPS declined by 4.7% over the past three years while total shareholder return over the past three years was 4.8%
The share price of Maximus, Inc. (NYSE:MMS) has struggled to grow by much over the last few years and probably has to do with the fact that earnings growth has gone backwards. The upcoming AGM on 12th of March may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. 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. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
See our latest analysis for Maximus
Comparing Maximus, Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Maximus, Inc. has a market capitalization of US$5.2b, and reported total annual CEO compensation of US$7.3m for the year to September 2023. That's a notable increase of 17% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$850k.
In comparison with other companies in the American Professional Services industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$9.1m. So it looks like Maximus compensates Bruce Caswell in line with the median for the industry. Moreover, Bruce Caswell also holds US$21m worth of Maximus 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 | US$850k | US$823k | 12% |
Other | US$6.5m | US$5.5m | 88% |
Total Compensation | US$7.3m | US$6.3m | 100% |
Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Maximus sets aside a smaller share of compensation for 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
Maximus, Inc. has reduced its earnings per share by 4.7% a year over the last three years. It achieved revenue growth of 5.4% over the last year.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Maximus, Inc. Been A Good Investment?
With a total shareholder return of 4.8% over three years, Maximus, Inc. has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
To Conclude...
While it's true that the share price growth hasn't been bad, it's hard to overlook the lack of earnings growth and this makes us question whether there will be any strong catalyst for the stock to improve. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Maximus that investors should look into moving forward.
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.
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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.
