Why We Think MasTec, Inc.'s (NYSE:MTZ) CEO Compensation Is Not Excessive At All

Key Insights

• MasTec's Annual General Meeting to take place on 22nd of May
• Total pay for CEO Jose Mas includes US$1.25m salary
• The overall pay is comparable to the industry average
• MasTec's total shareholder return over the past three years was 102% while its EPS was down 4.1% over the past three years

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MasTec, Inc. (NYSE:MTZ) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 22nd of May. 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 the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for MasTec

How Does Total Compensation For Jose Mas Compare With Other Companies In The Industry?

At the time of writing, our data shows that MasTec, Inc. has a market capitalization of US$12b, and reported total annual CEO compensation of US$11m for the year to December 2024. That's a notable increase of 12% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

In comparison with other companies in the American Construction industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$12m. So it looks like MasTec compensates Jose Mas in line with the median for the industry. What's more, Jose Mas holds US$781m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. MasTec sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

MasTec, Inc.'s Growth

MasTec, Inc. has reduced its earnings per share by 4.1% a year over the last three years. In the last year, its revenue is up 3.0%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has MasTec, Inc. Been A Good Investment?

Most shareholders would probably be pleased with MasTec, Inc. for providing a total return of 102% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 MasTec that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.