Michael Hill International Limited's (ASX:MHJ) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Michael Hill International to hold its Annual General Meeting on 14th of November
• CEO Daniel Bracken's total compensation includes salary of AU$1.06m
• Total compensation is 73% above industry average
• Michael Hill International's total shareholder return over the past three years was 88% while its EPS grew by 126% over the past three years

Under the guidance of CEO Daniel Bracken, Michael Hill International Limited (ASX:MHJ) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14th of November. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Michael Hill International

How Does Total Compensation For Daniel Bracken Compare With Other Companies In The Industry?

At the time of writing, our data shows that Michael Hill International Limited has a market capitalization of AU$313m, and reported total annual CEO compensation of AU$1.7m for the year to July 2023. That's a notable decrease of 25% on last year. In particular, the salary of AU$1.06m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Australian Specialty Retail industry with market capitalizations between AU$156m and AU$623m, we discovered that the median CEO total compensation of that group was AU$1.0m. This suggests that Daniel Bracken is paid more than the median for the industry. Moreover, Daniel Bracken also holds AU$2.3m worth of Michael Hill International 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$1.1m	AU$1.1m	61%
Other	AU$682k	AU$1.3m	39%
Total Compensation	AU$1.7m	AU$2.3m	100%

On an industry level, roughly 53% of total compensation represents salary and 47% is other remuneration. According to our research, Michael Hill International has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Michael Hill International Limited's Growth

Michael Hill International Limited's earnings per share (EPS) grew 126% per year over the last three years. Its revenue is up 5.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Michael Hill International Limited Been A Good Investment?

Boasting a total shareholder return of 88% over three years, Michael Hill International Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Michael Hill International that investors should look into moving forward.

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.