Here's Why MMTec, Inc.'s (NASDAQ:MTC) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• MMTec's Annual General Meeting to take place on 10th of November
• Total pay for CEO Xiangdong Wen includes US$305.1k salary
• Total compensation is 81% below industry average
• MMTec's EPS declined by 27% over the past three years while total shareholder loss over the past three years was 90%

Performance at MMTec, Inc. (NASDAQ:MTC) has been rather uninspiring recently and shareholders may be wondering how CEO Xiangdong Wen plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 10th of November. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

Check out our latest analysis for MMTec

Comparing MMTec, Inc.'s CEO Compensation With The Industry

According to our data, MMTec, Inc. has a market capitalization of US$205m, and paid its CEO total annual compensation worth US$314k over the year to December 2022. That's a notable increase of 81% on last year. Notably, the salary which is US$305.1k, represents most of the total compensation being paid.

In comparison with other companies in the American Software industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.7m. In other words, MMTec pays its CEO lower than the industry median. Moreover, Xiangdong Wen also holds US$313k worth of MMTec stock directly under their own name.

Speaking on an industry level, nearly 11% of total compensation represents salary, while the remainder of 89% is other remuneration. MMTec has gone down a largely traditional route, paying Xiangdong Wen a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

MMTec, Inc.'s Growth

Over the last three years, MMTec, Inc. has shrunk its earnings per share by 27% per year. In the last year, its revenue is up 68%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has MMTec, Inc. Been A Good Investment?

Few MMTec, Inc. shareholders would feel satisfied with the return of -90% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

MMTec pays its CEO a majority of compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. The poor performance of the share price might have something to do with the lack of earnings growth. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for MMTec you should be aware of, and 3 of them are a bit unpleasant.

Important note: MMTec is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.