Shareholders Will Probably Hold Off On Increasing Mattioli Woods plc's (LON:MTW) CEO Compensation For The Time Being

Despite positive share price growth of 26% for Mattioli Woods plc (LON:MTW) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 29 October 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Mattioli Woods

How Does Total Compensation For Ian Mattioli Compare With Other Companies In The Industry?

According to our data, Mattioli Woods plc has a market capitalization of UK£404m, and paid its CEO total annual compensation worth UK£1.5m over the year to May 2021. Notably, that's an increase of 35% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£372k.

On examining similar-sized companies in the industry with market capitalizations between UK£145m and UK£581m, we discovered that the median CEO total compensation of that group was UK£809k. This suggests that Ian Mattioli is paid more than the median for the industry. Moreover, Ian Mattioli also holds UK£27m worth of Mattioli Woods stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	UK£372k	UK£474k	25%
Other	UK£1.1m	UK£612k	75%
Total Compensation	UK£1.5m	UK£1.1m	100%

On an industry level, roughly 47% of total compensation represents salary and 53% is other remuneration. It's interesting to note that Mattioli Woods allocates a smaller portion of compensation to salary 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.

Mattioli Woods plc's Growth

Over the last three years, Mattioli Woods plc has shrunk its earnings per share by 55% per year. In the last year, its revenue is up 7.2%.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced 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 Mattioli Woods plc Been A Good Investment?

With a total shareholder return of 26% over three years, Mattioli Woods plc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Mattioli Woods (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Mattioli Woods, 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.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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