A Quick Analysis On Mayne Pharma Group's (ASX:MYX) CEO Compensation

This article will reflect on the compensation paid to Scott Richards who has served as CEO of Mayne Pharma Group Limited (ASX:MYX) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Mayne Pharma Group.

Check out our latest analysis for Mayne Pharma Group

How Does Total Compensation For Scott Richards Compare With Other Companies In The Industry?

According to our data, Mayne Pharma Group Limited has a market capitalization of AU$596m, and paid its CEO total annual compensation worth AU$3.0m over the year to June 2020. That's a fairly small increase of 3.3% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$979k.

In comparison with other companies in the industry with market capitalizations ranging from AU$275m to AU$1.1b, the reported median CEO total compensation was AU$1.5m. Accordingly, our analysis reveals that Mayne Pharma Group Limited pays Scott Richards north of the industry median. Moreover, Scott Richards also holds AU$9.2m worth of Mayne Pharma Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Mayne Pharma Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Mayne Pharma Group Limited's Growth

Mayne Pharma Group Limited has reduced its earnings per share by 47% a year over the last three years. In the last year, its revenue is down 13%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mayne Pharma Group Limited Been A Good Investment?

Given the total shareholder loss of 42% over three years, many shareholders in Mayne Pharma Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Mayne Pharma Group Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

Shareholders may want to check for free if Mayne Pharma Group insiders are buying or selling shares.

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. 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.
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