Yahoo Finance How Is Vectus Biosystems' (ASX:VBS) CEO Paid Relative To Peers?
The CEO of Vectus Biosystems Limited (ASX:VBS) is Karen Duggan, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Vectus Biosystems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Vectus Biosystems
Comparing Vectus Biosystems Limited's CEO Compensation With the industry
According to our data, Vectus Biosystems Limited has a market capitalization of AU$21m, and paid its CEO total annual compensation worth AU$230k over the year to June 2020. Notably, that's a decrease of 9.0% over the year before. We note that the salary portion, which stands at AU$196.5k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$281m, the reported median total CEO compensation was AU$440k. In other words, Vectus Biosystems pays its CEO lower than the industry median. Furthermore, Karen Duggan directly owns AU$3.2m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$196k | AU$183k | 85% |
Other | AU$33k | AU$69k | 15% |
Total Compensation | AU$230k | AU$253k | 100% |
Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. Vectus Biosystems pays out 85% 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.
Vectus Biosystems Limited's Growth
Vectus Biosystems Limited's earnings per share (EPS) grew 16% per year over the last three years. It achieved revenue growth of 23,166% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Vectus Biosystems Limited Been A Good Investment?
Given the total shareholder loss of 21% over three years, many shareholders in Vectus Biosystems Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we noted earlier, Vectus Biosystems pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Importantly though, the company has impressed with its EPS growth over three years. Considering EPS are on the up, we would say Karen is compensated fairly. But shareholders will likely want to hold off on any raise for Karen until investor returns are positive.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 3 which don't sit too well with us) in Vectus Biosystems we think you should know about.
Important note: Vectus Biosystems is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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