We Think Matthews International Corporation's (NASDAQ:MATW) CEO Compensation Package Needs To Be Put Under A Microscope

Matthews International Corporation (NASDAQ:MATW) has not performed well recently and CEO Joseph Bartolacci will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 17 February 2022. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Matthews International

Comparing Matthews International Corporation's CEO Compensation With the industry

According to our data, Matthews International Corporation has a market capitalization of US$1.1b, and paid its CEO total annual compensation worth US$6.8m over the year to September 2021. That's a modest increase of 3.6% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$944k.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.0m. This suggests that Joseph Bartolacci is paid more than the median for the industry. Moreover, Joseph Bartolacci also holds US$11m worth of Matthews International 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	US$944k	US$922k	14%
Other	US$5.9m	US$5.7m	86%
Total Compensation	US$6.8m	US$6.6m	100%

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. Matthews International 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.

A Look at Matthews International Corporation's Growth Numbers

Over the last three years, Matthews International Corporation has shrunk its earnings per share by 31% per year. In the last year, its revenue is up 13%.

The decline in EPS is a bit concerning. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around 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 Matthews International Corporation Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in Matthews International Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Matthews International (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Matthews International, 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.

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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.