There Could Be A Chance Vectus Biosystems Limited's (ASX:VBS) CEO Will Have Their Compensation Increased
Shareholders will probably not be disappointed by the robust results at Vectus Biosystems Limited (ASX:VBS) recently and they will be keeping this in mind as they go into the AGM on 23 November 2022. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
See our latest analysis for Vectus Biosystems
Comparing Vectus Biosystems Limited's CEO Compensation With The Industry
Our data indicates that Vectus Biosystems Limited has a market capitalization of AU$45m, and total annual CEO compensation was reported as AU$230k for the year to June 2022. That is, the compensation was roughly the same as last year. In particular, the salary of AU$209.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$295m, the reported median total CEO compensation was AU$638k. That is to say, Karen Duggan is paid under the industry median. Moreover, Karen Duggan also holds AU$3.1m worth of Vectus Biosystems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. Vectus Biosystems is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Vectus Biosystems Limited's Growth
Over the last three years, Vectus Biosystems Limited has shrunk its earnings per share by 16% per year. Its revenue is up 28% over the last year.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Vectus Biosystems Limited Been A Good Investment?
Boasting a total shareholder return of 68% over three years, Vectus Biosystems Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 6 warning signs for Vectus Biosystems (4 make us uncomfortable!) that you should be aware of before investing here.
Switching gears from Vectus Biosystems, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
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