Shareholders May Be Wary Of Increasing MediaAlpha, Inc.'s (NYSE:MAX) CEO Compensation Package
Key Insights
MediaAlpha to hold its Annual General Meeting on 16th of May
Salary of US$550.0k is part of CEO Steve Yi's total remuneration
Total compensation is similar to the industry average
MediaAlpha's three-year loss to shareholders was 48% while its EPS was down 35% over the past three years
Shareholders will probably not be too impressed with the underwhelming results at MediaAlpha, Inc. (NYSE:MAX) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 16th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.
View our latest analysis for MediaAlpha
How Does Total Compensation For Steve Yi Compare With Other Companies In The Industry?
Our data indicates that MediaAlpha, Inc. has a market capitalization of US$1.3b, and total annual CEO compensation was reported as US$5.8m for the year to December 2023. That's a notable increase of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$550k.
On examining similar-sized companies in the American Interactive Media and Services industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$5.3m. From this we gather that Steve Yi is paid around the median for CEOs in the industry. Moreover, Steve Yi also holds US$34m worth of MediaAlpha stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$550k | US$550k | 10% |
Other | US$5.2m | US$4.4m | 90% |
Total Compensation | US$5.8m | US$5.0m | 100% |
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. MediaAlpha sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at MediaAlpha, Inc.'s Growth Numbers
MediaAlpha, Inc. has reduced its earnings per share by 35% a year over the last three years. In the last year, its revenue is down 5.8%.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 MediaAlpha, Inc. Been A Good Investment?
Few MediaAlpha, Inc. shareholders would feel satisfied with the return of -48% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for MediaAlpha (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
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.
