Key Insights

• Matthews International will host its Annual General Meeting on 15th of February
• Total pay for CEO Joe Bartolacci includes US$1.04m salary
• The overall pay is 56% above the industry average
• Over the past three years, Matthews International's EPS grew by 5.4% and over the past three years, the total loss to shareholders 8.0%

In the past three years, shareholders of Matthews International Corporation (NASDAQ:MATW) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15th of February. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Joe Bartolacci Compare With Other Companies In The Industry?

Our data indicates that Matthews International Corporation has a market capitalization of US$860m, and total annual CEO compensation was reported as US$6.5m for the year to September 2023. That's just a smallish increase of 7.0% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

On comparing similar companies from the American Commercial Services industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$4.2m. Hence, we can conclude that Joe Bartolacci is remunerated higher than the industry median. Furthermore, Joe Bartolacci directly owns US$13m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. It's interesting to note that Matthews International 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.

Matthews International Corporation's Growth

Matthews International Corporation has seen its earnings per share (EPS) increase by 5.4% a year over the past three years. Its revenue is up 6.1% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Matthews International Corporation Been A Good Investment?

Since shareholders would have lost about 8.0% over three years, some Matthews International Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 2 warning signs (and 1 which shouldn't be ignored) in Matthews International we think you should know about.

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.