Is MRM (EPA:MRM) Excessively Paying Its CEO?

In 2009 Jacques Blanchard was appointed CEO of MRM (EPA:MRM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

View our latest analysis for MRM

How Does Jacques Blanchard’s Compensation Compare With Similar Sized Companies?

According to our data, MRM has a market capitalization of €62m, and paid its CEO total annual compensation worth €290k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €200k. We looked at a group of companies with market capitalizations under €180m, and the median CEO total compensation was €150k.

It would therefore appear that MRM pays Jacques Blanchard more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

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

ENXTPA:MRM CEO Compensation, October 23rd 2019
ENXTPA:MRM CEO Compensation, October 23rd 2019

Is MRM Growing?

On average over the last three years, MRM has shrunk earnings per share by 97% each year (measured with a line of best fit). It saw its revenue drop 15% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don’t have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has MRM Been A Good Investment?

MRM has generated a total shareholder return of 10% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

We examined the amount MRM pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don’t think the CEO pay is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling MRM (free visualization of insider trades).

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 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. Thank you for reading.