Frank Houllis became the CEO of Magnis Energy Technologies Limited (ASX:MNS) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Frank Houllis's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Magnis Energy Technologies Limited has a market cap of AU$44m, and reported total annual CEO compensation of AU$345k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$300k. We examined a group of similar sized companies, with market capitalizations of below AU$324m. The median CEO total compensation in that group is AU$390k.
So Frank Houllis is paid around the average of the companies we looked at. 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 Magnis Energy Technologies has changed from year to year.
Is Magnis Energy Technologies Limited Growing?
On average over the last three years, Magnis Energy Technologies Limited has grown earnings per share (EPS) by 39% each year (using a line of best fit). Its revenue is up 887% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Magnis Energy Technologies Limited Been A Good Investment?
Since shareholders would have lost about 90% over three years, some Magnis Energy Technologies Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Remuneration for Frank Houllis is close enough to the median pay for a CEO of a similar sized company .
We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. CEO compensation is an important area to keep your eyes on, but we've also identified 5 warning signs for Magnis Energy Technologies (2 don't sit too well with us!) that you should be aware of before investing here.
Important note: Magnis Energy Technologies 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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. Thank you for reading.