Is Money3 Corporation Limited (ASX:MNY) Overpaying Its CEO?




  • In Business
  • 2020-01-15 00:09:12Z
  • By Simply Wall St.
Is Money3 Corporation Limited (ASX:MNY) Overpaying Its CEO?
Is Money3 Corporation Limited (ASX:MNY) Overpaying Its CEO?  

Scott Baldwin became the CEO of Money3 Corporation Limited (ASX:MNY) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Money3

How Does Scott Baldwin's Compensation Compare With Similar Sized Companies?

Our data indicates that Money3 Corporation Limited is worth AU$443m, and total annual CEO compensation was reported as AU$1.4m for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$487k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from AU$289m to AU$1.2b, we found the median CEO total compensation was AU$1.0m.

As you can see, Scott Baldwin is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Money3 Corporation Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Money3, below.

Is Money3 Corporation Limited Growing?

Over the last three years Money3 Corporation Limited has grown its earnings per share (EPS) by an average of 3.2% per year (using a line of best fit). In the last year, its revenue is up 25%.

I would argue that the modest growth in revenue is a notable positive. And the improvement in earnings per share is modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. You might want to check this free visual report on analyst forecasts for future earnings.

Has Money3 Corporation Limited Been A Good Investment?

Most shareholders would probably be pleased with Money3 Corporation Limited for providing a total return of 59% over three years. 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.

In Summary...

We compared total CEO remuneration at Money3 Corporation Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years returns to investors have been great, though we might have liked stronger business growth. Considering this fine result for investors, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Money3 (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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