Rick McVey became the CEO of MarketAxess Holdings Inc. (NASDAQ:MKTX) in 2000. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Rick McVey’s Compensation Compare With Similar Sized Companies?
Our data indicates that MarketAxess Holdings Inc. is worth US$14b, and total annual CEO compensation was reported as US$17m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$500k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
Thus we can conclude that Rick McVey receives more in total compensation than the median of a group of large companies in the same market as MarketAxess Holdings Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. Shareholders might be interested in this free visualization of analyst forecasts.
The graphic below shows how CEO compensation at MarketAxess Holdings has changed from year to year.
Is MarketAxess Holdings Inc. Growing?
On average over the last three years, MarketAxess Holdings Inc. has grown earnings per share (EPS) by 15% each year (using a line of best fit). In the last year, its revenue is up 17%.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
Has MarketAxess Holdings Inc. Been A Good Investment?
Boasting a total shareholder return of 123% over three years, MarketAxess Holdings Inc. has done well by shareholders. 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.
We examined the amount MarketAxess Holdings Inc. pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying MarketAxess Holdings shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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