Is MGM Wireless Limited’s (ASX:MWR) CEO Overpaid Relative To Its Peers?

The CEO of MGM Wireless Limited (ASX:MWR) is Mark Fortunatow. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for MGM Wireless

How Does Mark Fortunatow’s Compensation Compare With Similar Sized Companies?

According to our data, MGM Wireless Limited has a market capitalization of AU$44m, and pays its CEO total annual compensation worth AU$606k. (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$417k. We looked at a group of companies with market capitalizations under AU$295m, and the median CEO total compensation was AU$355k.

It would therefore appear that MGM Wireless Limited pays Mark Fortunatow more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at MGM Wireless has changed over time.

ASX:MWR CEO Compensation, August 6th 2019
ASX:MWR CEO Compensation, August 6th 2019

Is MGM Wireless Limited Growing?

Over the last three years MGM Wireless Limited has shrunk its earnings per share by an average of 122% per year (measured with a line of best fit). Its revenue is up 104% over last year.

The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It’s hard to reach a conclusion about business performance right now. This may be one to watch.

Has MGM Wireless Limited Been A Good Investment?

Boasting a total shareholder return of 443% over three years, MGM Wireless Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We examined the amount MGM Wireless Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at MGM Wireless.

If you want to buy a stock that is better than MGM Wireless, 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 editorial-team@simplywallst.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.