Key Things To Understand About Mortgage Advice Bureau (Holdings)'s (LON:MAB1) CEO Pay Cheque

The CEO of Mortgage Advice Bureau (Holdings) plc (LON:MAB1) is Peter Christopher Brodnicki, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Mortgage Advice Bureau (Holdings)

Comparing Mortgage Advice Bureau (Holdings) plc's CEO Compensation With the industry

According to our data, Mortgage Advice Bureau (Holdings) plc has a market capitalization of UK£405m, and paid its CEO total annual compensation worth UK£667k over the year to December 2019. That's a notable increase of 34% on last year. Notably, the salary which is UK£377.1k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between UK£150m and UK£600m, we discovered that the median CEO total compensation of that group was UK£745k. So it looks like Mortgage Advice Bureau (Holdings) compensates Peter Christopher Brodnicki in line with the median for the industry. What's more, Peter Christopher Brodnicki holds UK£103m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Mortgage Advice Bureau (Holdings) pays out 57% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Mortgage Advice Bureau (Holdings) plc's Growth

Over the last three years, Mortgage Advice Bureau (Holdings) plc has shrunk its earnings per share by 1.5% per year. Its revenue is up 14% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Mortgage Advice Bureau (Holdings) plc Been A Good Investment?

We think that the total shareholder return of 51%, over three years, would leave most Mortgage Advice Bureau (Holdings) plc shareholders smiling. 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...

As previously discussed, Peter Christopher is compensated close to the median for companies of its size, and which belong to the same industry. Some investors may take issue with this, especially considering shrinking EPS for the past three years. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We wouldn't say CEO compensation is too high, but shareholders might think performance needs to be improved before paying any more.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Mortgage Advice Bureau (Holdings) that you should be aware of before investing.

Switching gears from Mortgage Advice Bureau (Holdings), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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