Tony Steels became the CEO of Mpac Group plc (LON:MPAC) in 2016, and we think it's a good time to look at 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.
View our latest analysis for Mpac Group
Comparing Mpac Group plc's CEO Compensation With the industry
At the time of writing, our data shows that Mpac Group plc has a market capitalization of UK£84m, and reported total annual CEO compensation of UK£671k for the year to December 2019. Notably, that's an increase of 66% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£243k.
In comparison with other companies in the industry with market capitalizations under UK£148m, the reported median total CEO compensation was UK£333k. Accordingly, our analysis reveals that Mpac Group plc pays Tony Steels north of the industry median. What's more, Tony Steels holds UK£334k worth of shares in the company in their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | UK£243k | UK£237k | 36% |
| Other | UK£428k | UK£167k | 64% |
| Total Compensation | UK£671k | UK£404k | 100% |
On an industry level, around 48% of total compensation represents salary and 52% is other remuneration. In Mpac Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Mpac Group plc's Growth Numbers
Over the past three years, Mpac Group plc has seen its earnings per share (EPS) grow by 44% per year. Its revenue is up 5.0% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Mpac Group plc Been A Good Investment?
Boasting a total shareholder return of 179% over three years, Mpac Group plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As previously discussed, Tony is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, Mpac Group has produced strong EPS growth and shareholder returns over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Tony deserves a raise!
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Mpac Group that investors should be aware of in a dynamic business environment.
Important note: Mpac Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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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About AIM:MPAC
Mpac Group
Provides packaging and automation solutions to healthcare, clean energy, and food and beverage sectors worldwide.
Reasonable growth potential with adequate balance sheet.
