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In 1996 Alvin Murstein was appointed CEO of Medallion Financial Corp. (NASDAQ:MFIN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Alvin Murstein’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Medallion Financial Corp. has a market cap of US$130m, and is paying total annual CEO compensation of US$1.4m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$869k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$300k.
As you can see, Alvin Murstein is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Medallion Financial Corp. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Medallion Financial, below.
Is Medallion Financial Corp. Growing?
On average over the last three years, Medallion Financial Corp. has shrunk earnings per share by 103% each year (measured with a line of best fit). It achieved revenue growth of 386% over the last year.
Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. Shareholders might be interested in this free visualization of analyst forecasts.
Has Medallion Financial Corp. Been A Good Investment?
Since shareholders would have lost about 8.0% over three years, some Medallion Financial Corp. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at Medallion Financial Corp. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. Shareholders may want to check for free if Medallion Financial insiders are buying or selling shares.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.