We Discuss Whether Medibank Private Limited's (ASX:MPL) CEO Is Due For A Pay Rise

Key Insights

• Medibank Private will host its Annual General Meeting on 22nd of November
• Salary of AU$1.54m is part of CEO David Koczkar's total remuneration
• The total compensation is 45% less than the average for the industry
• Over the past three years, Medibank Private's EPS grew by 17% and over the past three years, the total shareholder return was 39%

The impressive results at Medibank Private Limited (ASX:MPL) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 22nd of November which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for Medibank Private

How Does Total Compensation For David Koczkar Compare With Other Companies In The Industry?

Our data indicates that Medibank Private Limited has a market capitalization of AU$9.9b, and total annual CEO compensation was reported as AU$3.3m for the year to June 2023. That's a notable decrease of 13% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.5m.

In comparison with other companies in the Australian Insurance industry with market capitalizations ranging from AU$6.3b to AU$19b, the reported median CEO total compensation was AU$6.0m. That is to say, David Koczkar is paid under the industry median. Moreover, David Koczkar also holds AU$5.1m worth of Medibank Private stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$1.5m	AU$1.5m	47%
Other	AU$1.7m	AU$2.2m	53%
Total Compensation	AU$3.3m	AU$3.8m	100%

On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. Although there is a difference in how total compensation is set, Medibank Private more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Medibank Private Limited's Growth Numbers

Over the past three years, Medibank Private Limited has seen its earnings per share (EPS) grow by 17% per year. It achieved revenue growth of 5.5% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Medibank Private Limited Been A Good Investment?

We think that the total shareholder return of 39%, over three years, would leave most Medibank Private Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Medibank Private that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.