We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Macquarie Infrastructure Corporation's (NYSE:MIC) CEO For Now

The share price of Macquarie Infrastructure Corporation (NYSE:MIC) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 12 May 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Macquarie Infrastructure

Comparing Macquarie Infrastructure Corporation's CEO Compensation With the industry

According to our data, Macquarie Infrastructure Corporation has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$2.7m over the year to December 2020. We note that's a decrease of 8.2% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$500k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$712k. Hence, we can conclude that Christopher Frost is remunerated higher than the industry median.

Component	2020	2019	Proportion (2020)
Salary	US$500k	US$400k	19%
Other	US$2.2m	US$2.5m	81%
Total Compensation	US$2.7m	US$2.9m	100%

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. Macquarie Infrastructure sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Macquarie Infrastructure Corporation's Growth

Macquarie Infrastructure Corporation has reduced its earnings per share by 128% a year over the last three years. In the last year, its revenue is down 19%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Macquarie Infrastructure Corporation Been A Good Investment?

Boasting a total shareholder return of 48% over three years, Macquarie Infrastructure Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Macquarie Infrastructure that investors should think about before committing capital to this stock.

Important note: Macquarie Infrastructure 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. 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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