Rick McVey became the CEO of MarketAxess Holdings Inc. (NASDAQ:MKTX) in 2000. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Rick McVey’s Compensation Compare With Similar Sized Companies?
Our data indicates that MarketAxess Holdings Inc. is worth US$15b, and total annual CEO compensation is US$17m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$500k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
Thus we can conclude that Rick McVey receives more in total compensation than the median of a group of large companies in the same market as MarketAxess 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.
You can see, below, how CEO compensation at MarketAxess Holdings has changed over time.
Is MarketAxess Holdings Inc. Growing?
Over the last three years MarketAxess Holdings Inc. has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). It achieved revenue growth of 12% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Has MarketAxess Holdings Inc. Been A Good Investment?
I think that the total shareholder return of 141%, over three years, would leave most MarketAxess Holdings Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by MarketAxess Holdings Inc., and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling MarketAxess Holdings shares (free trial).
If you want to buy a stock that is better than MarketAxess Holdings, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at email@example.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.