Martin Smith became the CEO of Mainstream Group Holdings Limited (ASX:MAI) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Mainstream Group Holdings

How Does Martin Smith's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Mainstream Group Holdings Limited has a market cap of AU$72m, and reported total annual CEO compensation of AU$827k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$535k. We looked at a group of companies with market capitalizations under AU$290m, and the median CEO total compensation was AU$380k.

It would therefore appear that Mainstream Group Holdings Limited pays Martin Smith more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Mainstream Group Holdings has changed from year to year.

Is Mainstream Group Holdings Limited Growing?

Over the last three years Mainstream Group Holdings Limited has shrunk its earnings per share by an average of 40% per year (measured with a line of best fit). It achieved revenue growth of 22% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Mainstream Group Holdings Limited Been A Good Investment?

Mainstream Group Holdings Limited has not done too badly by shareholders, with a total return of 2.5%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We examined the amount Mainstream Group Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

We think many shareholders would be underwhelmed with the business growth over the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don't think the CEO pay is too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Mainstream Group Holdings.

If you want to buy a stock that is better than Mainstream Group Holdings, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.