Stock Analysis

Increases to Macquarie Group Limited's (ASX:MQG) CEO Compensation Might Cool off for now

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ASX:MQG
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CEO Shemara Wikramanayake has done a decent job of delivering relatively good performance at Macquarie Group Limited (ASX:MQG) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29 July 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Macquarie Group

How Does Total Compensation For Shemara Wikramanayake Compare With Other Companies In The Industry?

At the time of writing, our data shows that Macquarie Group Limited has a market capitalization of AU$56b, and reported total annual CEO compensation of AU$16m for the year to March 2021. That's just a smallish increase of 7.1% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$820k.

For comparison, other companies in the industry with market capitalizations above AU$11b, reported a median total CEO compensation of AU$9.9m. This suggests that Shemara Wikramanayake is paid more than the median for the industry. Moreover, Shemara Wikramanayake also holds AU$156m worth of Macquarie Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary AU$820k AU$796k 5%
Other AU$15m AU$14m 95%
Total CompensationAU$16m AU$15m100%

On an industry level, around 75% of total compensation represents salary and 25% is other remuneration. It's interesting to note that Macquarie Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ASX:MQG CEO Compensation July 22nd 2021

A Look at Macquarie Group Limited's Growth Numbers

Macquarie Group Limited has seen its earnings per share (EPS) increase by 3.6% a year over the past three years. In the last year, its revenue is up 4.8%.

We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Macquarie Group Limited Been A Good Investment?

We think that the total shareholder return of 42%, over three years, would leave most Macquarie Group Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Macquarie Group you should be aware of, and 1 of them is a bit unpleasant.

Switching gears from Macquarie Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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