Yahoo Finance Key Things To Understand About Magellan Aerospace's (TSE:MAL) CEO Pay Cheque
This article will reflect on the compensation paid to Phil Underwood who has served as CEO of Magellan Aerospace Corporation (TSE:MAL) since 2015. This analysis will also assess whether Magellan Aerospace pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Magellan Aerospace
How Does Total Compensation For Phil Underwood Compare With Other Companies In The Industry?
According to our data, Magellan Aerospace Corporation has a market capitalization of CA$518m, and paid its CEO total annual compensation worth CA$680k over the year to December 2019. Notably, that's a decrease of 16% over the year before. In particular, the salary of CA$470.5k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between CA$257m and CA$1.0b had a median total CEO compensation of CA$1.5m. That is to say, Phil Underwood is paid under the industry median.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$470k | CA$452k | 69% |
Other | CA$210k | CA$359k | 31% |
Total Compensation | CA$680k | CA$811k | 100% |
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Although there is a difference in how total compensation is set, Magellan Aerospace more or less reflects the market in terms of setting the salary. 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.
Magellan Aerospace Corporation's Growth
Over the last three years, Magellan Aerospace Corporation has shrunk its earnings per share by 29% per year. It saw its revenue drop 21% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Magellan Aerospace Corporation Been A Good Investment?
Given the total shareholder loss of 53% over three years, many shareholders in Magellan Aerospace Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we noted earlier, Magellan Aerospace pays its CEO lower than the norm for similar-sized companies belonging to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. It's tough to say that Phil is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Magellan Aerospace that investors should be aware of in a dynamic business environment.
Switching gears from Magellan Aerospace, 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.
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