We Think Mayne Pharma Group Limited's (ASX:MYX) CEO Compensation Package Needs To Be Put Under A Microscope

The results at Mayne Pharma Group Limited (ASX:MYX) have been quite disappointing recently and CEO Scott Richards bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 23 November 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Mayne Pharma Group

Comparing Mayne Pharma Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Mayne Pharma Group Limited has a market capitalization of AU$529m, and reported total annual CEO compensation of AU$3.1m for the year to June 2021. That's just a smallish increase of 6.0% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$979k.

In comparison with other companies in the industry with market capitalizations ranging from AU$272m to AU$1.1b, the reported median CEO total compensation was AU$1.3m. Accordingly, our analysis reveals that Mayne Pharma Group Limited pays Scott Richards north of the industry median. Moreover, Scott Richards also holds AU$10m 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.

Component	2021	2020	Proportion (2021)
Salary	AU$979k	AU$979k	31%
Other	AU$2.2m	AU$2.0m	69%
Total Compensation	AU$3.1m	AU$3.0m	100%

Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. Mayne Pharma Group pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Mayne Pharma Group Limited's Growth Numbers

Mayne Pharma Group Limited has reduced its earnings per share by 25% a year over the last three years. Its revenue is down 12% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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?

The return of -71% over three years would not have pleased Mayne Pharma Group Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Mayne Pharma Group that you should be aware of before investing.

Switching gears from Mayne Pharma 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.

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.

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