This article will reflect on the compensation paid to Scott Baldwin who has served as CEO of Money3 Corporation Limited (ASX:MNY) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Money3.
How Does Total Compensation For Scott Baldwin Compare With Other Companies In The Industry?
At the time of writing, our data shows that Money3 Corporation Limited has a market capitalization of AU$428m, and reported total annual CEO compensation of AU$1.1m for the year to June 2020. That's a notable decrease of 23% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$478k.
On examining similar-sized companies in the industry with market capitalizations between AU$281m and AU$1.1b, we discovered that the median CEO total compensation of that group was AU$889k. This suggests that Money3 remunerates its CEO largely in line with the industry average. Furthermore, Scott Baldwin directly owns AU$1.6m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. Although there is a difference in how total compensation is set, Money3 more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Money3 Corporation Limited's Growth
Money3 Corporation Limited has reduced its earnings per share by 14% a year over the last three years. Its revenue is up 35% over the last year.
The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Money3 Corporation Limited Been A Good Investment?
Most shareholders would probably be pleased with Money3 Corporation Limited for providing a total return of 64% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we noted earlier, Money3 pays its CEO in line with similar-sized companies belonging to the same industry. The company has logged solid shareholder returns for the past three years. Revenues have also showed some positive momentum, recently. On a sour note, EPS growth has been negative. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.
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 4 warning signs (and 1 which can't be ignored) in Money3 we think you should know about.
Important note: Money3 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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