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Performance at Materion Corporation (NYSE:MTRN) has been rather uninspiring recently and shareholders may be wondering how CEO Jugal Vijayvargiya plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 06 May 2021. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
Comparing Materion Corporation's CEO Compensation With the industry
Our data indicates that Materion Corporation has a market capitalization of US$1.5b, and total annual CEO compensation was reported as US$2.6m for the year to December 2020. Notably, that's a decrease of 49% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$779k.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$4.1m. Accordingly, Materion pays its CEO under the industry median. Moreover, Jugal Vijayvargiya also holds US$3.2m worth of Materion stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 36% of total compensation represents salary and 64% is other remuneration. Materion pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Materion Corporation's Growth Numbers
Over the last three years, Materion Corporation has shrunk its earnings per share by 7.0% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Materion Corporation Been A Good Investment?
Most shareholders would probably be pleased with Materion Corporation for providing a total return of 41% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Materion that you should be aware of before investing.
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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