Key Insights

Medibank Private's Annual General Meeting to take place on 22nd of November Salary of AU$1.54m is part of CEO David Koczkar's total remuneration Total compensation is 45% below industry average Medibank Private's total shareholder return over the past three years was 39% while its EPS grew by 17% over the past three years

The solid performance at Medibank Private Limited (ASX:MPL) has been impressive and shareholders will probably be pleased to know that CEO David Koczkar has delivered. This would be kept in mind at the upcoming AGM on 22nd of November which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for Medibank Private

Comparing Medibank Private Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Medibank Private Limited has a market capitalization of AU$9.9b, and reported total annual CEO compensation of AU$3.3m for the year to June 2023. Notably, that's a decrease of 13% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.5m.

On comparing similar companies from the Australian Insurance industry with market caps ranging from AU$6.3b to AU$19b, we found that the median CEO total compensation was AU$6.0m. In other words, Medibank Private pays its CEO lower than the industry median. Furthermore, David Koczkar directly owns AU$5.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component 2023 2022 Proportion (2023) Salary AU$1.5m AU$1.5m 47% Other AU$1.7m AU$2.2m 53% Total Compensation AU$3.3m AU$3.8m 100%

On an industry level, roughly 52% of total compensation represents salary and 48% is other remuneration. Although there is a difference in how total compensation is set, Medibank Private more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

 ceo-compensation

Medibank Private Limited's Growth

Medibank Private Limited has seen its earnings per share (EPS) increase by 17% a year over the past three years. Its revenue is up 5.5% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Medibank Private Limited Been A Good Investment?

Boasting a total shareholder return of 39% over three years, Medibank Private Limited 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.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Medibank Private that investors should be aware of in a dynamic business environment.

Important note: Medibank Private 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.

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.