Yahoo Finance Here's What We Learned About The CEO Pay At Volpara Health Technologies Limited (ASX:VHT)
Ralph Highnam is the CEO of Volpara Health Technologies Limited (ASX:VHT), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Volpara Health Technologies
How Does Total Compensation For Ralph Highnam Compare With Other Companies In The Industry?
At the time of writing, our data shows that Volpara Health Technologies Limited has a market capitalization of AU$334m, and reported total annual CEO compensation of NZ$395k for the year to March 2020. That's a slight decrease of 6.4% on the prior year. We note that the salary portion, which stands at NZ$323.7k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between AU$142m and AU$568m had a median total CEO compensation of NZ$747k. This suggests that Ralph Highnam is paid below the industry median. Moreover, Ralph Highnam also holds AU$21m worth of Volpara Health Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | NZ$324k | NZ$299k | 82% |
Other | NZ$71k | NZ$123k | 18% |
Total Compensation | NZ$395k | NZ$422k | 100% |
Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. It's interesting to note that Volpara Health Technologies pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Volpara Health Technologies Limited's Growth
Volpara Health Technologies Limited has reduced its earnings per share by 9.7% a year over the last three years. It achieved revenue growth of 151% over the last year.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Volpara Health Technologies Limited Been A Good Investment?
We think that the total shareholder return of 95%, over three years, would leave most Volpara Health Technologies Limited shareholders smiling. 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.
In Summary...
As previously discussed, Ralph is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. And as we saw, revenue growth and shareholder returns have been rising But it's noteworthy that EPS growth is in the red during the same time frame. But all things considered, we believe shareholders will be happy with the performance, and that's why CEO compensation is appropriate in our opinion.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Volpara Health Technologies that investors should be aware of in a dynamic business environment.
Switching gears from Volpara Health Technologies, 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.
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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