A Quick Analysis On Myer Holdings' (ASX:MYR) CEO Compensation
John King has been the CEO of Myer Holdings Limited (ASX:MYR) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Myer Holdings.
View our latest analysis for Myer Holdings
How Does Total Compensation For John King Compare With Other Companies In The Industry?
Our data indicates that Myer Holdings Limited has a market capitalization of AU$246m, and total annual CEO compensation was reported as AU$1.6m for the year to July 2020. Notably, that's a decrease of 15% over the year before. We note that the salary portion, which stands at AU$1.06m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations ranging from AU$132m to AU$526m, the reported median CEO total compensation was AU$848k. Accordingly, our analysis reveals that Myer Holdings Limited pays John King north of the industry median. Furthermore, John King directly owns AU$345k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$1.1m | AU$1.2m | 67% |
| Other | AU$533k | AU$665k | 33% |
| Total Compensation | AU$1.6m | AU$1.9m | 100% |
On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. Myer Holdings pays out 67% of remuneration in the form of a salary, significantly higher than the industry average. 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.
Myer Holdings Limited's Growth
Over the past three years, Myer Holdings Limited has seen its earnings per share (EPS) grow by 57% per year. Its revenue is down 14% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Myer Holdings Limited Been A Good Investment?
Since shareholders would have lost about 55% over three years, some Myer Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we touched on above, Myer Holdings 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. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say John is underpaid, in fact compensation is definitely on the higher side.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Myer Holdings that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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About ASX:MYR
Myer Holdings
Engages in the operation of department stores under the Myer brand name in Australia.
Second-rate dividend payer with questionable track record.
