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In 2016 Hessam Nadji was appointed CEO of Marcus & Millichap, Inc. (NYSE:MMI). First, this article will compare CEO compensation with compensation at similar sized 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.
How Does Hessam Nadji's Compensation Compare With Similar Sized Companies?
According to our data, Marcus & Millichap, Inc. has a market capitalization of US$1.4b, and paid its CEO total annual compensation worth US$3.1m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.
That means Hessam Nadji receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Marcus & Millichap has changed from year to year.
Is Marcus & Millichap, Inc. Growing?
Over the last three years Marcus & Millichap, Inc. has grown its earnings per share (EPS) by an average of 9.6% per year (using a line of best fit). It achieved revenue growth of 6.7% over the last year.
I'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Marcus & Millichap, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Marcus & Millichap, Inc. for providing a total return of 44% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Hessam Nadji is paid around the same as most CEOs of similar size companies.
While the growth could be better, the shareholder returns are clearly good. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Marcus & Millichap.
Important note: Marcus & Millichap 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.
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