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Increases to Macquarie Group Limited's (ASX:MQG) CEO Compensation Might Cool off for now

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Performance at Macquarie Group Limited (ASX:MQG) has been reasonably good and CEO Shemara Wikramanayake has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29 July 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Macquarie Group

Comparing Macquarie Group Limited's CEO Compensation With the industry

Our data indicates that Macquarie Group Limited has a market capitalization of AU$56b, and total annual CEO compensation was reported as AU$16m for the year to March 2021. That's a modest increase of 7.1% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$820k.

In comparison with other companies in the industry with market capitalizations over AU$11b , the reported median total CEO compensation was AU$9.9m. Hence, we can conclude that Shemara Wikramanayake is remunerated higher than the industry median. What's more, Shemara Wikramanayake holds AU$156m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2021

2020

Proportion (2021)

Salary

AU$820k

AU$796k

5%

Other

AU$15m

AU$14m

95%

Total Compensation

AU$16m

AU$15m

100%

Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. Macquarie Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Macquarie Group Limited's Growth

Over the past three years, Macquarie Group Limited has seen its earnings per share (EPS) grow by 3.6% per year. It achieved revenue growth of 4.8% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 Macquarie Group Limited Been A Good Investment?

Most shareholders would probably be pleased with Macquarie Group Limited for providing a total return of 42% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Macquarie Group you should be aware of, and 1 of them is a bit unpleasant.

Switching gears from Macquarie Group, 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.

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 (at) simplywallst.com.