Should Shareholders Worry About Montrose Environmental Group, Inc.'s (NYSE:MEG) CEO Compensation Package?

Key Insights

• Montrose Environmental Group will host its Annual General Meeting on 6th of May
• Total pay for CEO Vijay Manthripragada includes US$950.0k salary
• The overall pay is 43% below the industry average
• Montrose Environmental Group's EPS declined by 9.7% over the past three years while total shareholder loss over the past three years was 68%

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Performance at Montrose Environmental Group, Inc. (NYSE:MEG) has not been particularly rosy recently and shareholders will likely be holding CEO Vijay Manthripragada and the board accountable for this. The next AGM coming up on 6th of May will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

Check out our latest analysis for Montrose Environmental Group

How Does Total Compensation For Vijay Manthripragada Compare With Other Companies In The Industry?

According to our data, Montrose Environmental Group, Inc. has a market capitalization of US$527m, and paid its CEO total annual compensation worth US$2.2m over the year to December 2024. We note that's an increase of 16% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$950k.

For comparison, other companies in the American Commercial Services industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$3.9m. In other words, Montrose Environmental Group pays its CEO lower than the industry median. What's more, Vijay Manthripragada holds US$198k worth of shares in the company in their own name.

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. According to our research, Montrose Environmental Group has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Montrose Environmental Group, Inc.'s Growth Numbers

Montrose Environmental Group, Inc. has reduced its earnings per share by 9.7% a year over the last three years. Its revenue is up 12% over the last year.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Montrose Environmental Group, Inc. Been A Good Investment?

With a total shareholder return of -68% over three years, Montrose Environmental Group, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Montrose Environmental Group that you should be aware of before investing.

Switching gears from Montrose Environmental Group, 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.