Alvin Murstein became the CEO of Medallion Financial Corp. (NASDAQ:MFIN) in 1996. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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?
Our data indicates that Medallion Financial Corp. is worth US$171m, and total annual CEO compensation was reported as US$1.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$869k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.
So Alvin Murstein receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Medallion Financial has changed over time.
Is Medallion Financial Corp. Growing?
On average over the last three years, Medallion Financial Corp. has shrunk earnings per share by 77% each year (measured with a line of best fit). Its revenue is up 62% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Medallion Financial Corp. Been A Good Investment?
Most shareholders would probably be pleased with Medallion Financial Corp. for providing a total return of 196% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Alvin Murstein is paid around the same as most CEOs of similar size companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Medallion Financial shares (free trial).
If you want to buy a stock that is better than Medallion Financial, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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