How Should Investors Feel About Mannatech's (NASDAQ:MTEX) CEO Remuneration?
Al Bala became the CEO of Mannatech, Incorporated (NASDAQ:MTEX) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Mannatech.
Check out our latest analysis for Mannatech
How Does Total Compensation For Al Bala Compare With Other Companies In The Industry?
According to our data, Mannatech, Incorporated has a market capitalization of US$37m, and paid its CEO total annual compensation worth US$475k over the year to December 2019. We note that's a decrease of 27% compared to last year. In particular, the salary of US$440.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$275k. This suggests that Al Bala is paid more than the median for the industry. Furthermore, Al Bala directly owns US$80k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$440k | US$420k | 93% |
Other | US$35k | US$232k | 7% |
Total Compensation | US$475k | US$652k | 100% |
On an industry level, roughly 73% of total compensation represents salary and 27% is other remuneration. It's interesting to note that Mannatech pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Mannatech, Incorporated's Growth Numbers
Mannatech, Incorporated has seen its earnings per share (EPS) increase by 123% a year over the past three years. It saw its revenue drop 6.6% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Mannatech, Incorporated Been A Good Investment?
We think that the total shareholder return of 43%, over three years, would leave most Mannatech, Incorporated shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
As we touched on above, Mannatech, Incorporated is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Al's performance creates value for the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which are concerning) in Mannatech we think you should know about.
Important note: Mannatech is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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