Melos Sulicich became the CEO of MyState Limited (ASX:MYS) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether MyState pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for MyState

Comparing MyState Limited's CEO Compensation With the industry

Our data indicates that MyState Limited has a market capitalization of AU$479m, and total annual CEO compensation was reported as AU$708k for the year to June 2020. That's a slight decrease of 6.2% on the prior year. In particular, the salary of AU$600.0k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between AU$259m and AU$1.0b, we discovered that the median CEO total compensation of that group was AU$1.2m. In other words, MyState pays its CEO lower than the industry median. Moreover, Melos Sulicich also holds AU$651k worth of MyState stock directly under their own name.

Component 2020 2019 Proportion (2020) Salary AU$600k AU$600k 85% Other AU$108k AU$155k 15% Total Compensation AU$708k AU$754k 100%

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Although there is a difference in how total compensation is set, MyState more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower. ceo-compensation

A Look at MyState Limited's Growth Numbers

Over the last three years, MyState Limited has shrunk its earnings per share by 1.2% per year. Its revenue is up 2.7% over the last year.

The lack of EPS growth is certainly unimpressive. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..



Has MyState Limited Been A Good Investment?

MyState Limited has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As previously discussed, Melos is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we have not been overly impressed by shareholder returns, EPS growth has been negative over the last three years, a real headache for the company. We can't categorize CEO compensation as high, but shareholders might object to a raise at this stage, considering overall poor performance.

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 2 warning signs (and 1 which can't be ignored) in MyState we think you should know about.

Important note: MyState 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.

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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