What Can We Conclude About MaxiTRANS Industries' (ASX:MXI) CEO Pay?

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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for MaxiTRANS Industries

Comparing MaxiTRANS Industries Limited's CEO Compensation With the industry

According to our data, MaxiTRANS Industries Limited has a market capitalization of AU$63m, 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.

On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$370k. Accordingly, our analysis reveals that MaxiTRANS Industries Limited pays Dean Jenkins north of the industry median. Furthermore, Dean Jenkins directly owns AU$162k worth of shares in the company.

On an industry level, roughly 80% of total compensation represents salary and 20% 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

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

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has MaxiTRANS Industries Limited Been A Good Investment?

Given the total shareholder loss of 51% over three years, many shareholders in MaxiTRANS Industries Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Dean is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for MaxiTRANS Industries that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

If you decide to trade MaxiTRANS Industries, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.