It's Unlikely That Magyar Bancorp, Inc.'s (NASDAQ:MGYR) CEO Will See A Huge Pay Rise This Year
Performance at Magyar Bancorp, Inc. (NASDAQ:MGYR) has been reasonably good and CEO John Fitzgerald has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 16 February 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
See our latest analysis for Magyar Bancorp
Comparing Magyar Bancorp, Inc.'s CEO Compensation With the industry
Our data indicates that Magyar Bancorp, Inc. has a market capitalization of US$87m, and total annual CEO compensation was reported as US$914k for the year to September 2021. That's a fairly small increase of 4.4% over the previous year. Notably, the salary which is US$474.5k, represents a considerable chunk of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$510k. This suggests that John Fitzgerald is paid more than the median for the industry. What's more, John Fitzgerald holds US$1.3m worth of shares in the company in their own name.
Component | 2021 | 2020 | Proportion (2021) |
Salary | US$474k | US$452k | 52% |
Other | US$440k | US$423k | 48% |
Total Compensation | US$914k | US$875k | 100% |
On an industry level, roughly 52% of total compensation represents salary and 48% is other remuneration. There isn't a significant difference between Magyar Bancorp and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Magyar Bancorp, Inc.'s Growth
Magyar Bancorp, Inc.'s earnings per share (EPS) grew 40% per year over the last three years. In the last year, its revenue is up 24%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Magyar Bancorp, Inc. Been A Good Investment?
Magyar Bancorp, Inc. has served shareholders reasonably well, with a total return of 31% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
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.
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 Magyar Bancorp that investors should think about before committing capital to this stock.
Important note: Magyar Bancorp is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
