In 2012 Rene Sugo was appointed CEO of MNF Group Limited (ASX:MNF). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Rene Sugo's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that MNF Group Limited has a market cap of AU$379m, and reported total annual CEO compensation of AU$549k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$517k. We looked at a group of companies with market capitalizations from AU$168m to AU$671m, and the median CEO total compensation was AU$1.1m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of MNF Group. Talking in terms of the sector, salary represented approximately 64% of total compensation out of all the companies we analysed, while other remuneration made up 36% of the pie. According to our research, MNF Group has allocated a higher percentage of pay to salary in comparison to the broader sector.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at MNF Group, below.
Is MNF Group Limited Growing?
MNF Group Limited saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. In the last year, its revenue is down 2.3%.
In the last three years the company has failed to grow earnings per share. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has MNF Group Limited Been A Good Investment?
With a total shareholder return of 3.5% over three years, MNF Group Limited has done okay by shareholders. 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.
It looks like MNF Group Limited pays its CEO less than similar sized companies.
Rene Sugo is remunerated more modestly than is a normal at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. There is room for improved company performance, but we don't see the CEO pay as a big issue here. On another note, MNF Group has 3 warning signs (and 2 which can't be ignored) we think you should know about.
If you want to buy a stock that is better than MNF Group, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.