How Does MaxiTRANS Industries' (ASX:MXI) CEO Salary Compare to Peers?

This article will reflect on the compensation paid to Dean Jenkins who has served as CEO of MaxiTRANS Industries Limited (ASX:MXI) since 2017. This analysis will also assess whether MaxiTRANS Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for MaxiTRANS Industries

How Does Total Compensation For Dean Jenkins Compare With Other Companies In The Industry?

According to our data, MaxiTRANS Industries Limited has a market capitalization of AU$56m, and paid its CEO total annual compensation worth AU$819k over the year to June 2020. That is, the compensation was roughly the same as last year. Notably, the salary which is AU$647.4k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$384k. This suggests that Dean Jenkins is paid more than the median for the industry. Furthermore, Dean Jenkins directly owns AU$137k worth of shares in the company.

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Although there is a difference in how total compensation is set, MaxiTRANS Industries more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

MaxiTRANS Industries Limited's Growth

MaxiTRANS Industries Limited has reduced its earnings per share by 104% a year over the last three years. Its revenue is down 8.5% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 MaxiTRANS Industries Limited Been A Good Investment?

With a three year total loss of 58% for the shareholders, MaxiTRANS Industries Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, MaxiTRANS Industries Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for MaxiTRANS Industries that investors should think about before committing capital to this stock.

Important note: MaxiTRANS Industries is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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. 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.
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