Shareholders Will Probably Not Have Any Issues With Monash IVF Group Limited's (ASX:MVF) CEO Compensation

Despite Monash IVF Group Limited's (ASX:MVF) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 11 November 2022. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out the opportunities and risks within the AU Healthcare industry.

Comparing Monash IVF Group Limited's CEO Compensation With The Industry

According to our data, Monash IVF Group Limited has a market capitalization of AU$362m, and paid its CEO total annual compensation worth AU$794k over the year to June 2022. We note that's a decrease of 13% compared to last year. In particular, the salary of AU$552.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$159m and AU$636m had a median total CEO compensation of AU$1.0m. This suggests that Monash IVF Group remunerates its CEO largely in line with the industry average. Furthermore, Michael Knaap directly owns AU$140k worth of shares in the company.

Component	2022	2021	Proportion (2022)
Salary	AU$552k	AU$501k	70%
Other	AU$242k	AU$407k	30%
Total Compensation	AU$794k	AU$908k	100%

Talking in terms of the industry, salary represented approximately 55% of total compensation out of all the companies we analyzed, while other remuneration made up 45% of the pie. According to our research, Monash IVF Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Monash IVF Group Limited's Growth Numbers

Monash IVF Group Limited has reduced its earnings per share by 18% a year over the last three years. Its revenue is up 4.7% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Monash IVF Group Limited Been A Good Investment?

Monash IVF Group Limited has served shareholders reasonably well, with a total return of 12% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 Monash IVF Group that you should be aware of before investing.

Switching gears from Monash IVF 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.