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Does MarketAxess Holdings Inc.'s (NASDAQ:MKTX) CEO Pay Compare Well With Peers?

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Rick McVey became the CEO of MarketAxess Holdings Inc. (NASDAQ:MKTX) in 2000. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for MarketAxess Holdings

How Does Rick McVey's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that MarketAxess Holdings Inc. has a market cap of US$11b, and is paying total annual CEO compensation of US$17m. (This figure is for the year to December 2018). Notably, that's an increase of 184% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$500k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

It would therefore appear that MarketAxess Holdings Inc. pays Rick McVey more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at MarketAxess Holdings, below.

NasdaqGS:MKTX CEO Compensation, May 9th 2019
NasdaqGS:MKTX CEO Compensation, May 9th 2019

Is MarketAxess Holdings Inc. Growing?

Over the last three years MarketAxess Holdings Inc. has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). In the last year, its revenue is up 9.9%.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.

Has MarketAxess Holdings Inc. Been A Good Investment?

I think that the total shareholder return of 118%, over three years, would leave most MarketAxess Holdings Inc. shareholders smiling. 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...

We compared the total CEO remuneration paid by MarketAxess Holdings Inc., and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if MarketAxess Holdings insiders are buying or selling shares.

Important note: MarketAxess Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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