Is MMA Capital Holdings, Inc. (NASDAQ:MMAC) Overpaying Its CEO?

Mike Falcone has been the CEO of MMA Capital Holdings, Inc. (NASDAQ:MMAC) since 2005. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for MMA Capital Holdings

How Does Mike Falcone’s Compensation Compare With Similar Sized Companies?

According to our data, MMA Capital Holdings, Inc. has a market capitalization of US$195m, and pays its CEO total annual compensation worth US$1.7m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$555k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.0m.

Thus we can conclude that Mike Falcone receives more in total compensation than the median of a group of companies in the same market, and of similar size to MMA Capital Holdings, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at MMA Capital Holdings has changed from year to year.

NasdaqCM:MMAC CEO Compensation, March 14th 2019
NasdaqCM:MMAC CEO Compensation, March 14th 2019

Is MMA Capital Holdings, Inc. Growing?

On average over the last three years, MMA Capital Holdings, Inc. has grown earnings per share (EPS) by 6.8% each year (using a line of best fit). It achieved revenue growth of 233% over the last year.

It’s great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. I wouldn’t say this is necessarily top notch growth, but it is certainly promising. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has MMA Capital Holdings, Inc. Been A Good Investment?

Most shareholders would probably be pleased with MMA Capital Holdings, Inc. for providing a total return of 121% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We examined the amount MMA Capital Holdings, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying MMA Capital Holdings shares with their own money (free access).

Important note: MMA Capital Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.