Increases to CEO Compensation Might Be Put On Hold For Now at MBIA Inc. (NYSE:MBI)

CEO Bill Fallon has done a decent job of delivering relatively good performance at MBIA Inc. (NYSE:MBI) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 05 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for MBIA

Comparing MBIA Inc.'s CEO Compensation With the industry

According to our data, MBIA Inc. has a market capitalization of US$542m, and paid its CEO total annual compensation worth US$4.1m over the year to December 2020. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$900k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.1m. Accordingly, our analysis reveals that MBIA Inc. pays Bill Fallon north of the industry median. Furthermore, Bill Fallon directly owns US$25m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$900k	US$900k	22%
Other	US$3.2m	US$3.1m	78%
Total Compensation	US$4.1m	US$4.0m	100%

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. MBIA pays out 22% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

MBIA Inc.'s Growth

Over the past three years, MBIA Inc. has seen its earnings per share (EPS) grow by 5.5% per year. In the last year, its revenue is down 7.3%.

We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has MBIA Inc. Been A Good Investment?

MBIA Inc. has served shareholders reasonably well, with a total return of 23% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for MBIA you should be aware of, and 1 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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. 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.
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