We Take A Look At Why Materion Corporation's (NYSE:MTRN) CEO Compensation Is Well Earned
Key Insights
Materion will host its Annual General Meeting on 9th of May
CEO Jugal Vijayvargiya's total compensation includes salary of US$881.7k
Total compensation is similar to the industry average
Materion's total shareholder return over the past three years was 45% while its EPS grew by 32% over the past three years
The performance at Materion Corporation (NYSE:MTRN) has been quite strong recently and CEO Jugal Vijayvargiya has played a role in it. Coming up to the next AGM on 9th of May, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.
Check out our latest analysis for Materion
Comparing Materion Corporation's CEO Compensation With The Industry
Our data indicates that Materion Corporation has a market capitalization of US$2.4b, and total annual CEO compensation was reported as US$6.0m for the year to December 2023. Notably, that's an increase of 33% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$882k.
For comparison, other companies in the American Metals and Mining industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$6.0m. So it looks like Materion compensates Jugal Vijayvargiya in line with the median for the industry. Moreover, Jugal Vijayvargiya also holds US$12m worth of Materion stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$882k | US$821k | 15% |
Other | US$5.1m | US$3.7m | 85% |
Total Compensation | US$6.0m | US$4.5m | 100% |
Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Materion pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Materion Corporation's Growth Numbers
Materion Corporation's earnings per share (EPS) grew 32% per year over the last three years. In the last year, its revenue is down 8.2%.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Materion Corporation Been A Good Investment?
Boasting a total shareholder return of 45% over three years, Materion Corporation has done well by shareholders. 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...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Materion you should be aware of, and 1 of them can't be ignored.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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.
