Is MyState Limited (ASX:MYS) Overpaying Its CEO?

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Melos Sulicich became the CEO of MyState Limited (ASX:MYS) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for MyState

How Does Melos Sulicich’s Compensation Compare With Similar Sized Companies?

Our data indicates that MyState Limited is worth AU$423m, and total annual CEO compensation is AU$791k. (This is based on the year to 2018). While we always look at total compensation first, we note that the salary component is less, at AU$550k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$282m to AU$1.1b. The median total CEO compensation was AU$1.2m.

A first glance this seems like a real positive for shareholders, since Melos Sulicich is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at MyState has changed over time.

ASX:MYS CEO Compensation February 11th 19
ASX:MYS CEO Compensation February 11th 19

Is MyState Limited Growing?

MyState Limited has reduced its earnings per share by an average of 2.4% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1.2% over the last year.

The lack of earnings per share growth in the last three years is unimpressive. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has MyState Limited Been A Good Investment?

With a total shareholder return of 32% over three years, MyState Limited shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

It appears that MyState Limited remunerates its CEO below most similar sized companies.

The compensation paid to Melos Sulicich is lower than is usual at similar sized companies. But the business isn’t growing earnings per share, and the returns to shareholders haven’t been wonderful. So while shareholders shouldn’t be overly concerned about CEO compensation, we suspect most would prefer see improved performance, before increasing pay. So you may want to check if insiders are buying MyState shares with their own money (free access).

If you want to buy a stock that is better than MyState, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.com.