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John Hewitt became the CEO of Matrix Service Company (NASDAQ:MTRX) in 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does John Hewitt’s Compensation Compare With Similar Sized Companies?
According to our data, Matrix Service Company has a market capitalization of US$531m, and pays its CEO total annual compensation worth US$2.4m. (This figure is for the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$750k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.7m.
Thus we can conclude that John Hewitt receives more in total compensation than the median of a group of companies in the same market, and of similar size to Matrix Service Company. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Matrix Service has changed over time.
Is Matrix Service Company Growing?
Over the last three years Matrix Service Company has shrunk its earnings per share by an average of 108% per year (measured with a line of best fit). Its revenue is up 9.3% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Matrix Service Company Been A Good Investment?
With a total shareholder return of 31% over three years, Matrix Service Company shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We examined the amount Matrix Service Company pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.We think many shareholders would be underwhelmed with the business growth over the last three years.
And shareholder returns are decent but not great. So we doubt many shareholders would consider the CEO pay to be particularly modest! Whatever your view on compensation, you might want to check if insiders are buying or selling Matrix Service shares (free trial).
If you want to buy a stock that is better than Matrix Service, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.