In 2014 Fraser Whineray was appointed CEO of Mercury NZ Limited (NZSE:MCY). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Fraser Whineray’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Mercury NZ Limited has a market cap of NZ$6.9b, and reported total annual CEO compensation of NZ$2.0m for the year to June 2019. We note that’s an increase of 9.6% above last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at NZ$1.1m. We examined companies with market caps from NZ$3.2b to NZ$10b, and discovered that the median CEO total compensation of that group was NZ$2.1m.
So Fraser Whineray receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Mercury NZ has changed from year to year.
Is Mercury NZ Limited Growing?
Over the last three years Mercury NZ Limited has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). In the last year, its revenue is up 11%.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Mercury NZ Limited Been A Good Investment?
I think that the total shareholder return of 100%, over three years, would leave most Mercury NZ Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Fraser Whineray is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Shareholders may want to check for free if Mercury NZ insiders are buying or selling shares.
If you want to buy a stock that is better than Mercury NZ, this free list of high return, low debt companies is a great place to look.
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