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Is Mueller Industries, Inc.'s (NYSE:MLI) CEO Paid Enough Relative To Peers?

Simply Wall St

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Greg Christopher became the CEO of Mueller Industries, Inc. (NYSE:MLI) in 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Mueller Industries

How Does Greg Christopher's Compensation Compare With Similar Sized Companies?

According to our data, Mueller Industries, Inc. has a market capitalization of US$1.7b, and pays its CEO total annual compensation worth US$7.4m. (This is based on the year to December 2018). We note that's an increase of 59% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.

Thus we can conclude that Greg Christopher receives more in total compensation than the median of a group of companies in the same market, and of similar size to Mueller Industries, Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Mueller Industries has changed over time.

NYSE:MLI CEO Compensation, May 8th 2019

Is Mueller Industries, Inc. Growing?

On average over the last three years, Mueller Industries, Inc. has shrunk earnings per share by 1.8% each year (measured with a line of best fit). It achieved revenue growth of 6.5% over the last year.

Unfortunately there is a complete lack of earnings per share improvement, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Mueller Industries, Inc. Been A Good Investment?

Mueller Industries, Inc. has not done too badly by shareholders, with a total return of 6.8%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared the total CEO remuneration paid by Mueller Industries, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

While shareholder returns are acceptable, they don't delight. It's also worth noting total remuneration to the CEO has increased, year on year. So we think more research is needed, but we don't think the CEO underpaid. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Mueller Industries.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.