Maximus, Inc.'s (NYSE:MMS) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Maximus will host its Annual General Meeting on 14th of March
• Total pay for CEO Bruce Caswell includes US$823.1k salary
• The overall pay is 32% below the industry average
• Over the past three years, Maximus' EPS fell by 6.1% and over the past three years, the total shareholder return was 38%

Performance at Maximus, Inc. (NYSE:MMS) has been rather uninspiring recently and shareholders may be wondering how CEO Bruce Caswell 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 14th of March. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Maximus

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

According to our data, Maximus, Inc. has a market capitalization of US$4.9b, and paid its CEO total annual compensation worth US$6.3m over the year to September 2022. That's a notable decrease of 20% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$823k.

On comparing similar companies from the American IT industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$9.2m. Accordingly, Maximus pays its CEO under the industry median. Furthermore, Bruce Caswell directly owns US$17m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	US$823k	US$754k	13%
Other	US$5.5m	US$7.2m	87%
Total Compensation	US$6.3m	US$7.9m	100%

Speaking on an industry level, nearly 10% of total compensation represents salary, while the remainder of 90% is other remuneration. Maximus is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Maximus, Inc.'s Growth Numbers

Over the last three years, Maximus, Inc. has shrunk its earnings per share by 6.1% per year. In the last year, its revenue is up 6.0%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Maximus, Inc. Been A Good Investment?

Boasting a total shareholder return of 38% over three years, Maximus, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

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. That's why we did our research, and identified 3 warning signs for Maximus (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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. 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.