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Mike Salisbury became the CEO of McMillan Shakespeare Limited (ASX:MMS) 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Mike Salisbury’s Compensation Compare With Similar Sized Companies?
Our data indicates that McMillan Shakespeare Limited is worth AU$1.2b, and total annual CEO compensation is AU$1.2m. (This is based on the year to June 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$798k. We looked at a group of companies with market capitalizations from AU$582m to AU$2.3b, and the median CEO total compensation was AU$1.5m.
So Mike Salisbury is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at McMillan Shakespeare has changed over time.
Is McMillan Shakespeare Limited Growing?
McMillan Shakespeare Limited has reduced its earnings per share by an average of 18% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 1.3%.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has McMillan Shakespeare Limited Been A Good Investment?
McMillan Shakespeare Limited has served shareholders reasonably well, with a total return of 14% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Mike Salisbury is paid around the same as most CEOs of similar size companies.
The company isn’t growing earnings per share, and nor have the total returns inspired us. We’re not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at McMillan Shakespeare.
If you want to buy a stock that is better than McMillan Shakespeare, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.