Yahoo Finance The Compensation For Vita Life Sciences Limited's (ASX:VLS) CEO Looks Deserved And Here's Why
We have been pretty impressed with the performance at Vita Life Sciences Limited (ASX:VLS) recently and CEO Andrew O'Keefe deserves a mention for their role in it. Coming up to the next AGM on 28 May 2021, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
View our latest analysis for Vita Life Sciences
How Does Total Compensation For Andrew O'Keefe Compare With Other Companies In The Industry?
At the time of writing, our data shows that Vita Life Sciences Limited has a market capitalization of AU$57m, and reported total annual CEO compensation of AU$510k for the year to December 2020. That's slightly lower by 4.7% over the previous year. In particular, the salary of AU$440.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$454k. From this we gather that Andrew O'Keefe is paid around the median for CEOs in the industry.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$440k | AU$442k | 86% |
Other | AU$70k | AU$93k | 14% |
Total Compensation | AU$510k | AU$535k | 100% |
Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% of the pie. Vita Life Sciences is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Vita Life Sciences Limited's Growth Numbers
Vita Life Sciences Limited has seen its earnings per share (EPS) increase by 31% a year over the past three years. Its revenue is up 9.5% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Vita Life Sciences Limited Been A Good Investment?
Boasting a total shareholder return of 58% over three years, Vita Life Sciences 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.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed 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 2 warning signs for Vita Life Sciences that investors should be aware of in a dynamic business environment.
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.
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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