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Is Mayfield Childcare Limited's (ASX:MFD) CEO Pay Fair?

Simply Wall St

Dean Clarke has been the CEO of Mayfield Childcare Limited (ASX:MFD) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Mayfield Childcare

How Does Dean Clarke's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Mayfield Childcare Limited has a market cap of AU$32m, and reported total annual CEO compensation of AU$196k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at AU$176k. We looked at a group of companies with market capitalizations under AU$291m, and the median CEO total compensation was AU$382k.

Most shareholders would consider it a positive that Dean Clarke takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

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

ASX:MFD CEO Compensation, December 14th 2019

Is Mayfield Childcare Limited Growing?

On average over the last three years, Mayfield Childcare Limited has grown earnings per share (EPS) by 59% each year (using a line of best fit). Its revenue is up 14% over 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. You might want to check this free visual report on analyst forecasts for future earnings.

Has Mayfield Childcare Limited Been A Good Investment?

Mayfield Childcare Limited has not done too badly by shareholders, with a total return of 9.5%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

It looks like Mayfield Childcare Limited pays its CEO less than similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that Dean Clarke is paid too much. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Mayfield Childcare (free visualization of insider trades).

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.

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.

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.