How Should Investors Feel About Mullen Group Ltd.'s (TSE:MTL) CEO Pay?

Murray Mullen is the CEO of Mullen Group Ltd. (TSE:MTL). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Mullen Group

How Does Murray Mullen's Compensation Compare With Similar Sized Companies?

According to our data, Mullen Group Ltd. has a market capitalization of CA$1.0b, and paid its CEO total annual compensation worth CA$570k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at . Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$521m to CA$2.1b. The median total CEO compensation was CA$2.1m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Mullen Group has changed over time.

Is Mullen Group Ltd. Growing?

Mullen Group Ltd. has reduced its earnings per share by an average of 71% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 6.0%.

Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Mullen Group Ltd. Been A Good Investment?

With a three year total loss of 45%, Mullen Group Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It appears that Mullen Group Ltd. remunerates its CEO below most similar sized companies.

Shareholders should note that compensation for Murray Mullen is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. Whatever your view on compensation, you might want to check if insiders are buying or selling Mullen Group shares (free trial).

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.