Increases to MedAdvisor Limited's (ASX:MDR) CEO Compensation Might Cool off for now

By
Simply Wall St
Published
November 09, 2021
ASX:MDR
Source: Shutterstock

CEO Robert Read has done a decent job of delivering relatively good performance at MedAdvisor Limited (ASX:MDR) recently. As shareholders go into the upcoming AGM on 16 November 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for MedAdvisor

Comparing MedAdvisor Limited's CEO Compensation With the industry

At the time of writing, our data shows that MedAdvisor Limited has a market capitalization of AU$149m, and reported total annual CEO compensation of AU$739k for the year to June 2021. That's a notable increase of 60% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$294k.

In comparison with other companies in the industry with market capitalizations under AU$269m, the reported median total CEO compensation was AU$460k. This suggests that Robert Read is paid more than the median for the industry. What's more, Robert Read holds AU$1.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary AU$294k AU$292k 40%
Other AU$445k AU$169k 60%
Total CompensationAU$739k AU$461k100%

Talking in terms of the industry, salary represented approximately 56% of total compensation out of all the companies we analyzed, while other remuneration made up 44% of the pie. It's interesting to note that MedAdvisor 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:MDR CEO Compensation November 10th 2021

A Look at MedAdvisor Limited's Growth Numbers

MedAdvisor Limited has reduced its earnings per share by 13% a year over the last three years. In the last year, its revenue is up 304%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has MedAdvisor Limited Been A Good Investment?

Boasting a total shareholder return of 55% over three years, MedAdvisor Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already 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 4 warning signs for MedAdvisor you should be aware of, and 3 of them are a bit concerning.

Important note: MedAdvisor 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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