Most Shareholders Will Probably Find That The CEO Compensation For Maximus, Inc. (NYSE:MMS) Is Reasonable
Performance at Maximus, Inc. (NYSE:MMS) has been reasonably good and CEO Bruce Caswell has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 16 March 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.
See our latest analysis for Maximus
How Does Total Compensation For Bruce Caswell Compare With Other Companies In The Industry?
At the time of writing, our data shows that Maximus, Inc. has a market capitalization of US$5.3b, and reported total annual CEO compensation of US$6.1m for the year to September 2020. We note that's an increase of 23% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$743k.
On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$6.7m. So it looks like Maximus compensates Bruce Caswell in line with the median for the industry. What's more, Bruce Caswell holds US$10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$743k | US$719k | 12% |
Other | US$5.4m | US$4.3m | 88% |
Total Compensation | US$6.1m | US$5.0m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. In Maximus' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Maximus, Inc.'s Growth
Maximus, Inc.'s earnings per share (EPS) grew 1.4% per year over the last three years. It achieved revenue growth of 18% over the last year.
We think the revenue growth is good. And, while modest, the EPS growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Maximus, Inc. Been A Good Investment?
Maximus, Inc. has served shareholders reasonably well, with a total return of 32% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.
Whatever your view on compensation, you might want to check if insiders are buying or selling Maximus shares (free trial).
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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