Yahoo Finance Should Shareholders Have Second Thoughts About A Pay Rise For Vector Capital Plc's (LON:VCAP) CEO This Year?
Key Insights
Vector Capital to hold its Annual General Meeting on 16th of May
Salary of UK£87.5k is part of CEO Agam Jain's total remuneration
Total compensation is 80% below industry average
Vector Capital's three-year loss to shareholders was 23% while its EPS was down 14% over the past three years
The underwhelming performance at Vector Capital Plc (LON:VCAP) recently has probably not pleased shareholders. The next AGM coming up on 16th of May will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. The data we gathered below shows that CEO compensation looks acceptable for now.
Check out our latest analysis for Vector Capital
Comparing Vector Capital Plc's CEO Compensation With The Industry
According to our data, Vector Capital Plc has a market capitalization of UK£15m, and paid its CEO total annual compensation worth UK£108k over the year to December 2023. Notably, that's a decrease of 10% over the year before. We note that the salary portion, which stands at UK£87.5k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the British Diversified Financial industry with market capitalizations below UK£160m, we found that the median total CEO compensation was UK£539k. Accordingly, Vector Capital pays its CEO under the industry median. What's more, Agam Jain holds UK£11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | UK£88k | UK£100k | 81% |
Other | UK£20k | UK£20k | 19% |
Total Compensation | UK£108k | UK£120k | 100% |
Talking in terms of the industry, salary represented approximately 48% of total compensation out of all the companies we analyzed, while other remuneration made up 52% of the pie. Vector Capital pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. 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 Vector Capital Plc's Growth Numbers
Over the last three years, Vector Capital Plc has shrunk its earnings per share by 14% per year. In the last year, its revenue is down 3.6%.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Vector Capital Plc Been A Good Investment?
With a three year total loss of 23% for the shareholders, Vector Capital Plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Vector Capital you should be aware of, and 1 of them is significant.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
