We Think The Compensation For Montrose Environmental Group, Inc.'s (NYSE:MEG) CEO Looks About Right

Key Insights

• Montrose Environmental Group to hold its Annual General Meeting on 7th of May
• CEO Vijay Manthripragada's total compensation includes salary of US$775.0k
• The overall pay is 58% below the industry average
• Montrose Environmental Group's EPS grew by 45% over the past three years while total shareholder loss over the past three years was 25%

Shareholders may be wondering what CEO Vijay Manthripragada plans to do to improve the less than great performance at Montrose Environmental Group, Inc. (NYSE:MEG) recently. At the next AGM coming up on 7th of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

Check out our latest analysis for Montrose Environmental Group

Comparing Montrose Environmental Group, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Montrose Environmental Group, Inc. has a market capitalization of US$1.5b, and reported total annual CEO compensation of US$1.9m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$775k.

For comparison, other companies in the American Commercial Services industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$4.6m. That is to say, Vijay Manthripragada is paid under the industry median. Furthermore, Vijay Manthripragada directly owns US$561k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$775k	US$775k	40%
Other	US$1.1m	US$1.2m	60%
Total Compensation	US$1.9m	US$2.0m	100%

On an industry level, around 23% of total compensation represents salary and 77% 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. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Montrose Environmental Group, Inc.'s Growth

Montrose Environmental Group, Inc. has seen its earnings per share (EPS) increase by 45% a year over the past three years. In the last year, its revenue is up 15%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Montrose Environmental Group, Inc. Been A Good Investment?

Given the total shareholder loss of 25% over three years, many shareholders in Montrose Environmental Group, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key question may be why the fundamentals have not yet been reflected into the share price. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for Montrose Environmental Group that investors should look into moving forward.

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.