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Rene Sugo became the CEO of MNF Group Limited (ASX:MNF) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Rene Sugo’s Compensation Compare With Similar Sized Companies?
Our data indicates that MNF Group Limited is worth AU$272m, and total annual CEO compensation is AU$684k. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$517k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$143m to AU$572m. The median total CEO compensation was AU$736k.
So Rene Sugo receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at MNF Group has changed from year to year.
Is MNF Group Limited Growing?
On average over the last three years, MNF Group Limited has grown earnings per share (EPS) by 5.0% each year (using a line of best fit). In the last year, its revenue is down -6.8%.
I would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see EPS growth. It’s hard to reach a conclusion about business performance right now. This may be one to watch.
Has MNF Group Limited Been A Good Investment?
Since shareholders would have lost about 2.5% over three years, some MNF Group Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Rene Sugo is paid around the same as most CEOs of similar size companies.
The per share growth could be better, in our view. And we think the shareholder returns – over three years – have been underwhelming. So suffice it to say we don’t think the compensation is modest. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at MNF Group.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.