Our View On Mediclinic International's (LON:MDC) CEO Pay

Ronnie van der Merwe has been the CEO of Mediclinic International plc (LON:MDC) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Mediclinic International pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Mediclinic International

How Does Total Compensation For Ronnie van der Merwe Compare With Other Companies In The Industry?

Our data indicates that Mediclinic International plc has a market capitalization of UK£2.1b, and total annual CEO compensation was reported as UK£601k for the year to March 2020. We note that's a decrease of 13% compared to last year. We note that the salary portion, which stands at UK£543.0k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from UK£1.5b to UK£4.8b, we found that the median CEO total compensation was UK£858k. So it looks like Mediclinic International compensates Ronnie van der Merwe in line with the median for the industry. Furthermore, Ronnie van der Merwe directly owns UK£147k worth of shares in the company.

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. According to our research, Mediclinic International has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Mediclinic International plc's Growth Numbers

Mediclinic International plc's earnings per share (EPS) grew 1.6% per year over the last three years. Its revenue is down 2.6% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mediclinic International plc Been A Good Investment?

Since shareholders would have lost about 48% over three years, some Mediclinic International plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Mediclinic International plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, Mediclinic International is suffering from adverse shareholder returns and althoughEPS have grown over the past three years, they have not been extraordinary. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.

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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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