Yahoo Finance How Should Investors React To Vmoto Limited’s (ASX:VMT) CEO Pay?
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Charles Chen has been the CEO of Vmoto Limited (ASX:VMT) since 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Vmoto
How Does Charles Chen’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Vmoto Limited has a market cap of AU$13m, and is paying total annual CEO compensation of AU$230k. (This number is for the twelve months until 2016). We think total compensation is more important but we note that the CEO salary is lower, at AU$210k. We looked at a group of companies with market capitalizations under AU$282m, and the median CEO compensation was AU$363k.
Most shareholders would consider it a positive that Charles Chen takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Vmoto has changed from year to year.
Is Vmoto Limited Growing?
On average over the last three years, Vmoto Limited has shrunk earnings per share by 67% each year (measured with a line of best fit). In the last year, its revenue is up 120%.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is 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 Vmoto Limited Been A Good Investment?
With a three year total loss of 84%, Vmoto Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
It appears that Vmoto Limited remunerates its CEO below most similar sized companies.
Charles Chen receives relatively low remuneration compared to similar sized companies. But the company isn’t exactly firing on all cylinders, and returns over three years are not good. So while shareholders shouldn’t be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. So you may want to check if insiders are buying Vmoto shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
