Yahoo Finance We Think LiveHire Limited's (ASX:LVH) CEO Compensation Package Needs To Be Put Under A Microscope
Key Insights
LiveHire's Annual General Meeting to take place on 27th of November
Total pay for CEO Christy Forest includes AU$341.0k salary
The total compensation is 70% higher than the average for the industry
LiveHire's EPS declined by 5.8% over the past three years while total shareholder loss over the past three years was 78%
LiveHire Limited (ASX:LVH) has not performed well recently and CEO Christy Forest will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27th of November. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for LiveHire
How Does Total Compensation For Christy Forest Compare With Other Companies In The Industry?
At the time of writing, our data shows that LiveHire Limited has a market capitalization of AU$22m, and reported total annual CEO compensation of AU$858k for the year to June 2023. We note that's an increase of 9.4% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$341k.
In comparison with other companies in the Australian Software industry with market capitalizations under AU$305m, the reported median total CEO compensation was AU$504k. Accordingly, our analysis reveals that LiveHire Limited pays Christy Forest north of the industry median. Furthermore, Christy Forest directly owns AU$1.4m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$341k | AU$322k | 40% |
Other | AU$517k | AU$462k | 60% |
Total Compensation | AU$858k | AU$784k | 100% |
Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. It's interesting to note that LiveHire allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at LiveHire Limited's Growth Numbers
LiveHire Limited has reduced its earnings per share by 5.8% a year over the last three years. In the last year, its revenue is up 9.8%.
Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has LiveHire Limited Been A Good Investment?
The return of -78% over three years would not have pleased LiveHire Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
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, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which doesn't sit too well with us) in LiveHire we think you should know about.
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.
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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.
