Yahoo Finance Here's What We Think About Love Group Global's (ASX:LVE) CEO Pay
This article will reflect on the compensation paid to Michael Ye who has served as CEO of Love Group Global Ltd (ASX:LVE) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Love Group Global
Comparing Love Group Global Ltd's CEO Compensation With the industry
Our data indicates that Love Group Global Ltd has a market capitalization of AU$2.2m, and total annual CEO compensation was reported as AU$265k for the year to June 2020. We note that's a decrease of 24% compared to last year. In particular, the salary of AU$261.4k, 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$275m, the reported median total CEO compensation was AU$335k. This suggests that Love Group Global remunerates its CEO largely in line with the industry average. Moreover, Michael Ye also holds AU$746k worth of Love Group Global 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 | AU$261k | AU$286k | 99% |
Other | AU$3.4k | AU$65k | 1% |
Total Compensation | AU$265k | AU$351k | 100% |
Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. Investors will find it interesting that Love Group Global pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Love Group Global Ltd's Growth
Love Group Global Ltd's earnings per share (EPS) grew 85% per year over the last three years. Its revenue is down 34% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Love Group Global Ltd Been A Good Investment?
Given the total shareholder loss of 39% over three years, many shareholders in Love Group Global Ltd are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Michael receives almost all of their compensation through a salary. As we noted earlier, Love Group Global pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Love Group Global you should be aware of, and 2 of them make us uncomfortable.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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