How Much Is Melcor Developments Ltd. (TSE:MRD) CEO Getting Paid?

This article will reflect on the compensation paid to Darin Rayburn who has served as CEO of Melcor Developments Ltd. (TSE:MRD) since 2017. This analysis will also assess whether Melcor Developments pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Melcor Developments

Comparing Melcor Developments Ltd.'s CEO Compensation With the industry

Our data indicates that Melcor Developments Ltd. has a market capitalization of CA$267m, and total annual CEO compensation was reported as CA$922k for the year to December 2019. That's a notable decrease of 8.4% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$400k.

On comparing similar companies from the same industry with market caps ranging from CA$128m to CA$512m, we found that the median CEO total compensation was CA$1.1m. From this we gather that Darin Rayburn is paid around the median for CEOs in the industry. Furthermore, Darin Rayburn directly owns CA$405k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 46% of total compensation out of all the companies we analyzed, while other remuneration made up 54% of the pie. Melcor Developments is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Melcor Developments Ltd.'s Growth

Over the last three years, Melcor Developments Ltd. has shrunk its earnings per share by 1.6% per year. In the last year, its revenue is down 10%.

Its a bit disappointing to see that the company has failed to grow its EPS. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Melcor Developments Ltd. Been A Good Investment?

Since shareholders would have lost about 40% over three years, some Melcor Developments Ltd. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Melcor Developments pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

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 6 warning signs for Melcor Developments (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the 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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