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How Should Investors React To Mueller Industries' (NYSE:MLI) CEO Pay?

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Simply Wall St
·3 min read
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This article will reflect on the compensation paid to Greg Christopher who has served as CEO of Mueller Industries, Inc. (NYSE:MLI) since 2008. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Mueller Industries.

Check out our latest analysis for Mueller Industries

Comparing Mueller Industries, Inc.'s CEO Compensation With the industry

Our data indicates that Mueller Industries, Inc. has a market capitalization of US$1.9b, and total annual CEO compensation was reported as US$8.1m for the year to December 2019. Notably, that's an increase of 9.7% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$4.2m. Hence, we can conclude that Greg Christopher is remunerated higher than the industry median. Moreover, Greg Christopher also holds US$24m worth of Mueller Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$1.3m

US$1.1m

15%

Other

US$6.8m

US$6.2m

85%

Total Compensation

US$8.1m

US$7.4m

100%

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Mueller Industries is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Mueller Industries, Inc.'s Growth Numbers

Mueller Industries, Inc. has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is down 7.4% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Mueller Industries, Inc. Been A Good Investment?

With a total shareholder return of 1.5% over three years, Mueller Industries, Inc. has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we touched on above, Mueller Industries, Inc. 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 the company has impressed us with its EPS growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.

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 1 warning sign for Mueller Industries that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.