Key Insights

• Matrix Composites & Engineering to hold its Annual General Meeting on 23rd of November

• Salary of AU$382.5k is part of CEO Aaron Begley's total remuneration

• The total compensation is similar to the average for the industry

• Matrix Composites & Engineering's EPS grew by 103% over the past three years while total shareholder return over the past three years was 104%

The performance at Matrix Composites & Engineering Ltd (ASX:MCE) has been quite strong recently and CEO Aaron Begley has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 23rd of November. 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. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Matrix Composites & Engineering

Comparing Matrix Composites & Engineering Ltd's CEO Compensation With The Industry

Our data indicates that Matrix Composites & Engineering Ltd has a market capitalization of AU$59m, and total annual CEO compensation was reported as AU$731k for the year to June 2023. That's a notable increase of 12% on last year. Notably, the salary which is AU$382.5k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Australia Energy Services industry with market capitalizations below AU$307m, reported a median total CEO compensation of AU$569k. From this we gather that Aaron Begley is paid around the median for CEOs in the industry. Furthermore, Aaron Begley directly owns AU$2.1m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 39% of total compensation represents salary and 61% is other remuneration. It's interesting to note that Matrix Composites & Engineering pays out a greater portion of remuneration through salary, compared to the 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.

Matrix Composites & Engineering Ltd's Growth

Matrix Composites & Engineering Ltd's earnings per share (EPS) grew 103% per year over the last three years. Its revenue is up 65% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Matrix Composites & Engineering Ltd Been A Good Investment?

Boasting a total shareholder return of 104% over three years, Matrix Composites & Engineering Ltd has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 2 which are significant) in Matrix Composites & Engineering we think you should know about.

Important note: Matrix Composites & Engineering is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.