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Is Mainfreight Limited (NZSE:MFT) Overpaying Its CEO?

Simply Wall St

Don Braid is the CEO of Mainfreight Limited (NZSE:MFT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Mainfreight

How Does Don Braid's Compensation Compare With Similar Sized Companies?

Our data indicates that Mainfreight Limited is worth NZ$4.0b, and total annual CEO compensation was reported as NZ$2.8m for the year to March 2019. That's just a smallish increase of 4.7% on last year. While we always look at total compensation first, we note that the salary component is less, at NZ$2.1m. We examined companies with market caps from NZ$3.2b to NZ$10b, and discovered that the median CEO total compensation of that group was NZ$2.1m.

It would therefore appear that Mainfreight Limited pays Don Braid more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Mainfreight, below.

NZSE:MFT CEO Compensation, September 25th 2019

Is Mainfreight Limited Growing?

On average over the last three years, Mainfreight Limited has grown earnings per share (EPS) by 13% each year (using a line of best fit). Its revenue is up 13% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Mainfreight Limited Been A Good Investment?

Boasting a total shareholder return of 141% over three years, Mainfreight Limited has done well by shareholders. 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.

In Summary...

We compared total CEO remuneration at Mainfreight Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Mainfreight shares with their own money (free access).

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.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.