Shareholders Will Probably Hold Off On Increasing Mader Group Limited's (ASX:MAD) CEO Compensation For The Time Being
Key Insights
Mader Group will host its Annual General Meeting on 23rd of November
Total pay for CEO Justin Nuich includes AU$624.2k salary
Total compensation is 63% above industry average
Over the past three years, Mader Group's EPS grew by 30% and over the past three years, the total shareholder return was 642%
CEO Justin Nuich has done a decent job of delivering relatively good performance at Mader Group Limited (ASX:MAD) recently. As shareholders go into the upcoming AGM on 23rd of November, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.
View our latest analysis for Mader Group
How Does Total Compensation For Justin Nuich Compare With Other Companies In The Industry?
According to our data, Mader Group Limited has a market capitalization of AU$1.3b, and paid its CEO total annual compensation worth AU$2.6m over the year to June 2023. Notably, that's an increase of 56% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$624k.
On comparing similar companies from the Australian Commercial Services industry with market caps ranging from AU$615m to AU$2.5b, we found that the median CEO total compensation was AU$1.6m. Accordingly, our analysis reveals that Mader Group Limited pays Justin Nuich north of the industry median. Moreover, Justin Nuich also holds AU$1.2m worth of Mader Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$624k | AU$527k | 24% |
Other | AU$2.0m | AU$1.2m | 76% |
Total Compensation | AU$2.6m | AU$1.7m | 100% |
On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Mader Group 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 Mader Group Limited's Growth Numbers
Over the past three years, Mader Group Limited has seen its earnings per share (EPS) grow by 30% per year. Its revenue is up 51% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Mader Group Limited Been A Good Investment?
We think that the total shareholder return of 642%, over three years, would leave most Mader Group Limited shareholders smiling. 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...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Mader Group that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
