We Think Mayr-Melnhof Karton AG's (VIE:MMK) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Mayr-Melnhof Karton will host its Annual General Meeting on 24th of April
• Salary of €1.28m is part of CEO Peter Oswald's total remuneration
• The overall pay is 36% above the industry average
• Over the past three years, Mayr-Melnhof Karton's EPS fell by 19% and over the past three years, the total loss to shareholders 30%

Shareholders will probably not be too impressed with the underwhelming results at Mayr-Melnhof Karton AG (VIE:MMK) recently. At the upcoming AGM on 24th of April, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Mayr-Melnhof Karton

How Does Total Compensation For Peter Oswald Compare With Other Companies In The Industry?

According to our data, Mayr-Melnhof Karton AG has a market capitalization of €2.3b, and paid its CEO total annual compensation worth €3.9m over the year to December 2023. Notably, that's a decrease of 31% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.3m.

On examining similar-sized companies in the Austria Packaging industry with market capitalizations between €1.9b and €6.0b, we discovered that the median CEO total compensation of that group was €2.9m. Accordingly, our analysis reveals that Mayr-Melnhof Karton AG pays Peter Oswald north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	€1.3m	€1.2m	33%
Other	€2.6m	€4.5m	67%
Total Compensation	€3.9m	€5.7m	100%

On an industry level, roughly 46% of total compensation represents salary and 54% is other remuneration. It's interesting to note that Mayr-Melnhof Karton allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Mayr-Melnhof Karton AG's Growth

Over the last three years, Mayr-Melnhof Karton AG has shrunk its earnings per share by 19% per year. It saw its revenue drop 11% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Mayr-Melnhof Karton AG Been A Good Investment?

With a total shareholder return of -30% over three years, Mayr-Melnhof Karton AG shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Mayr-Melnhof Karton 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.