Peter Bauer became the CEO of Mimecast Limited (NASDAQ:MIME) in 2003, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Mimecast pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Peter Bauer Compare With Other Companies In The Industry?
According to our data, Mimecast Limited has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$2.3m over the year to March 2020. That's a notable increase of 37% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$370k.
On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$6.0m. Accordingly, Mimecast pays its CEO under the industry median. Furthermore, Peter Bauer directly owns US$175m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. Mimecast pays out 16% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Mimecast Limited's Growth
Mimecast Limited has seen its earnings per share (EPS) increase by 42% a year over the past three years. Its revenue is up 23% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Mimecast Limited Been A Good Investment?
Boasting a total shareholder return of 85% over three years, Mimecast Limited 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.
As we touched on above, Mimecast Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Peter deserves a raise!
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Mimecast that you should be aware of before investing.
Switching gears from Mimecast, 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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