Key Insights

Mercury NZ's Annual General Meeting to take place on 19th of September CEO Vince James Hawksworth's total compensation includes salary of NZ$1.39m The total compensation is similar to the average for the industry Mercury NZ's total shareholder return over the past three years was 38% while its EPS was down 22% over the past three years

Performance at Mercury NZ Limited (NZSE:MCY) has been reasonably good and CEO Vince James Hawksworth has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 19th of September. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Mercury NZ

How Does Total Compensation For Vince James Hawksworth Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mercury NZ Limited has a market capitalization of NZ$8.6b, and reported total annual CEO compensation of NZ$3.4m for the year to June 2023. We note that's an increase of 62% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at NZ$1.4m.

For comparison, other companies in the New Zealand Electric Utilities industry with market capitalizations ranging between NZ$6.8b and NZ$20b had a median total CEO compensation of NZ$3.8m. From this we gather that Vince James Hawksworth is paid around the median for CEOs in the industry. Furthermore, Vince James Hawksworth directly owns NZ$1.6m worth of shares in the company.

Component 2023 2022 Proportion (2023) Salary NZ$1.4m NZ$1.3m 41% Other NZ$2.0m NZ$808k 59% Total Compensation NZ$3.4m NZ$2.1m 100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. It's interesting to note that Mercury NZ allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

 ceo-compensation

Mercury NZ Limited's Growth

Mercury NZ Limited has reduced its earnings per share by 22% a year over the last three years. In the last year, its revenue is up 25%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Mercury NZ Limited Been A Good Investment?

Boasting a total shareholder return of 38% over three years, Mercury NZ Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The overall company performance has been commendable, however there are still areas for improvement. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Mercury NZ (1 is potentially serious!) that you should be aware of before investing here.

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