This article will reflect on the compensation paid to Laurie McAllister who has served as CEO of McPherson's Limited (ASX:MCP) since 2016. This analysis will also assess whether McPherson's pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for McPherson's
How Does Total Compensation For Laurie McAllister Compare With Other Companies In The Industry?
Our data indicates that McPherson's Limited has a market capitalization of AU$277m, and total annual CEO compensation was reported as AU$1.4m for the year to June 2020. We note that's an increase of 28% above last year. We note that the salary portion, which stands at AU$708.1k constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the same industry with market caps ranging from AU$138m to AU$550m, we found that the median CEO total compensation was AU$769k. This suggests that Laurie McAllister is paid more than the median for the industry.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$708k | AU$728k | 50% |
Other | AU$706k | AU$378k | 50% |
Total Compensation | AU$1.4m | AU$1.1m | 100% |
Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. McPherson's pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at McPherson's Limited's Growth Numbers
Over the past three years, McPherson's Limited has seen its earnings per share (EPS) grow by 25% per year. In the last year, its revenue is up 5.8%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has McPherson's Limited Been A Good Investment?
Most shareholders would probably be pleased with McPherson's Limited for providing a total return of 112% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
As previously discussed, Laurie is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Laurie deserves a raise!
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. We've identified 5 warning signs for McPherson's that investors should be aware of in a dynamic business environment.
Switching gears from McPherson's, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.