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A Quick Analysis On Mercury Systems' (NASDAQ:MRCY) CEO Salary

Simply Wall St
·4 mins read

Mark Aslett has been the CEO of Mercury Systems, Inc. (NASDAQ:MRCY) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Mercury Systems

Comparing Mercury Systems, Inc.'s CEO Compensation With the industry

According to our data, Mercury Systems, Inc. has a market capitalization of US$4.4b, and paid its CEO total annual compensation worth US$5.5m over the year to July 2020. We note that's an increase of 32% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$672k.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$7.5m. From this we gather that Mark Aslett is paid around the median for CEOs in the industry. What's more, Mark Aslett holds US$23m 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$672k

US$613k

12%

Other

US$4.9m

US$3.6m

88%

Total Compensation

US$5.5m

US$4.2m

100%

On an industry level, roughly 17% of total compensation represents salary and 83% is other remuneration. In Mercury Systems' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Mercury Systems, Inc.'s Growth

Mercury Systems, Inc.'s earnings per share (EPS) grew 38% per year over the last three years. Its revenue is up 21% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Mercury Systems, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Mercury Systems, Inc. for providing a total return of 49% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Mercury Systems, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Mercury Systems that you should be aware of before investing.

Switching gears from Mercury Systems, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.