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Is MarketAxess Holdings Inc.'s (NASDAQ:MKTX) CEO Paid At A Competitive Rate?

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Simply Wall St
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Rick McVey has been the CEO of MarketAxess Holdings Inc. (NASDAQ:MKTX) since 2000. This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for MarketAxess Holdings

How Does Rick McVey's Compensation Compare With Similar Sized Companies?

According to our data, MarketAxess Holdings Inc. has a market capitalization of US$14b, and paid its CEO total annual compensation worth US$17m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$500k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

As you can see, Rick McVey is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean MarketAxess Holdings Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at MarketAxess Holdings has changed from year to year.

NasdaqGS:MKTX CEO Compensation, November 5th 2019
NasdaqGS:MKTX CEO Compensation, November 5th 2019

Is MarketAxess Holdings Inc. Growing?

On average over the last three years, MarketAxess Holdings Inc. has grown earnings per share (EPS) by 15% each year (using a line of best fit). It achieved revenue growth of 17% over the last year.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has MarketAxess Holdings Inc. Been A Good Investment?

Most shareholders would probably be pleased with MarketAxess Holdings Inc. for providing a total return of 139% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared the total CEO remuneration paid by MarketAxess Holdings Inc., and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying MarketAxess Holdings shares with their own money (free access).

If you want to buy a stock that is better than MarketAxess Holdings, this free list of high return, low debt companies is a great place to look.

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.