Increases to MoneyGram International, Inc.'s (NASDAQ:MGI) CEO Compensation Might Cool off for now

In the past three years, the share price of MoneyGram International, Inc. (NASDAQ:MGI) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 05 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for MoneyGram International

How Does Total Compensation For Alex Holmes Compare With Other Companies In The Industry?

At the time of writing, our data shows that MoneyGram International, Inc. has a market capitalization of US$590m, and reported total annual CEO compensation of US$6.0m for the year to December 2020. Notably, that's an increase of 60% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$909k.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$1.8m. Accordingly, our analysis reveals that MoneyGram International, Inc. pays Alex Holmes north of the industry median. Furthermore, Alex Holmes directly owns US$3.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$909k	US$873k	15%
Other	US$5.1m	US$2.9m	85%
Total Compensation	US$6.0m	US$3.7m	100%

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. There isn't a significant difference between MoneyGram International and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at MoneyGram International, Inc.'s Growth Numbers

MoneyGram International, Inc. has seen its earnings per share (EPS) increase by 6.5% a year over the past three years. Its revenue is down 5.3% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has MoneyGram International, Inc. Been A Good Investment?

Given the total shareholder loss of 12% over three years, many shareholders in MoneyGram International, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is significant) in MoneyGram International we think you should know about.

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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