Stock Analysis

Shareholders May Not Be So Generous With MNF Group Limited's (ASX:MNF) CEO Compensation And Here's Why

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Performance at MNF Group Limited (ASX:MNF) has been reasonably good and CEO Rene Sugo has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 09 November 2021. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for MNF Group

How Does Total Compensation For Rene Sugo Compare With Other Companies In The Industry?

Our data indicates that MNF Group Limited has a market capitalization of AU$603m, and total annual CEO compensation was reported as AU$957k for the year to June 2021. We note that's an increase of 47% above last year. We note that the salary portion, which stands at AU$575.0k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from AU$266m to AU$1.1b, we found that the median CEO total compensation was AU$726k. Accordingly, our analysis reveals that MNF Group Limited pays Rene Sugo north of the industry median. What's more, Rene Sugo holds AU$52m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary AU$575k AU$517k 60%
Other AU$382k AU$134k 40%
Total CompensationAU$957k AU$651k100%

Speaking on an industry level, nearly 41% of total compensation represents salary, while the remainder of 59% is other remuneration. According to our research, MNF Group 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.

ASX:MNF CEO Compensation November 2nd 2021

A Look at MNF Group Limited's Growth Numbers

MNF Group Limited has seen its earnings per share (EPS) increase by 1.2% a year over the past three years. It saw its revenue drop 5.2% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has MNF Group Limited Been A Good Investment?

Boasting a total shareholder return of 85% over three years, MNF Group Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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 MNF Group that you should be aware of before investing.

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.

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