Mainfreight Limited's (NZSE:MFT) CEO Compensation Is Looking A Bit Stretched At The Moment

editorial-team@simplywallst.com (Simply Wall St)

18 July 2024 at 2:01 pm·3-min read

Key Insights

Mainfreight will host its Annual General Meeting on 25th of July
Salary of NZ$2.90m is part of CEO Don Braid's total remuneration
The overall pay is 49% above the industry average
Over the past three years, Mainfreight's EPS grew by 3.5% and over the past three years, the total shareholder return was 7.6%

CEO Don Braid has done a decent job of delivering relatively good performance at Mainfreight Limited (NZSE:MFT) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25th of July. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Mainfreight

Comparing Mainfreight Limited's CEO Compensation With The Industry

According to our data, Mainfreight Limited has a market capitalization of NZ$7.8b, and paid its CEO total annual compensation worth NZ$3.8m over the year to March 2024. That's a modest increase of 7.0% on the prior year. In particular, the salary of NZ$2.90m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the New Zealand Logistics industry with market capitalizations ranging between NZ$3.3b and NZ$11b had a median total CEO compensation of NZ$2.5m. Accordingly, our analysis reveals that Mainfreight Limited pays Don Braid north of the industry median. Furthermore, Don Braid directly owns NZ$225m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	NZ$2.9m	NZ$2.7m	77%
Other	NZ$881k	NZ$835k	23%
Total Compensation	NZ$3.8m	NZ$3.5m	100%

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. Although there is a difference in how total compensation is set, Mainfreight 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.

A Look at Mainfreight Limited's Growth Numbers

Mainfreight Limited has seen its earnings per share (EPS) increase by 3.5% a year over the past three years. In the last year, its revenue is down 17%.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mainfreight Limited Been A Good Investment?

With a total shareholder return of 7.6% over three years, Mainfreight Limited has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Mainfreight that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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

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Key Insights

Comparing Mainfreight Limited's CEO Compensation With The Industry

A Look at Mainfreight Limited's Growth Numbers

Has Mainfreight Limited Been A Good Investment?

To Conclude...

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