We Discuss Why Mosaic Brands Limited's (ASX:MOZ) CEO Compensation May Be Closely Reviewed

The results at Mosaic Brands Limited (ASX:MOZ) have been quite disappointing recently and CEO Scott Evans 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 17 November 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Mosaic Brands

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

Our data indicates that Mosaic Brands Limited has a market capitalization of AU$59m, and total annual CEO compensation was reported as AU$1.5m for the year to June 2021. We note that's an increase of 31% above last year. Notably, the salary which is AU$1.44m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$272m, we found that the median total CEO compensation was AU$1.1m. Accordingly, our analysis reveals that Mosaic Brands Limited pays Scott Evans north of the industry median. Furthermore, Scott Evans directly owns AU$2.9m worth of shares in the company.

Component	2021	2020	Proportion (2021)
Salary	AU$1.4m	AU$1.1m	97%
Other	AU$52k	AU$65k	3%
Total Compensation	AU$1.5m	AU$1.1m	100%

On an industry level, roughly 38% of total compensation represents salary and 62% is other remuneration. Mosaic Brands has gone down a largely traditional route, paying Scott Evans a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Mosaic Brands Limited's Growth

Over the last three years, Mosaic Brands Limited has shrunk its earnings per share by 49% per year. In the last year, its revenue is down 5.2%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. 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 Mosaic Brands Limited Been A Good Investment?

Few Mosaic Brands Limited shareholders would feel satisfied with the return of -77% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Scott receives almost all of their compensation through a salary. 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 pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Mosaic Brands (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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.

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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