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Ajay Banga has been the CEO of Mastercard Incorporated (NYSE:MA) since 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. 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.
How Does Ajay Banga's Compensation Compare With Similar Sized Companies?
According to our data, Mastercard Incorporated has a market capitalization of US$263b, and pays its CEO total annual compensation worth US$20m. (This figure is for the year to December 2018). We note that's an increase of 9.1% above last year. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
It would therefore appear that Mastercard Incorporated pays Ajay Banga more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Mastercard, below.
Is Mastercard Incorporated Growing?
Mastercard Incorporated has increased its earnings per share (EPS) by an average of 18% a year, over the last three years (using a line of best fit). It achieved revenue growth of 14% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Mastercard Incorporated Been A Good Investment?
Most shareholders would probably be pleased with Mastercard Incorporated for providing a total return of 176% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Mastercard Incorporated with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Mastercard insiders are buying or selling shares.
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 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. Thank you for reading.