Yahoo Finance Our View On dorsaVi's (ASX:DVL) CEO Pay
Andrew Ronchi has been the CEO of dorsaVi Ltd (ASX:DVL) since 2008, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for dorsaVi.
Check out our latest analysis for dorsaVi
How Does Total Compensation For Andrew Ronchi Compare With Other Companies In The Industry?
According to our data, dorsaVi Ltd has a market capitalization of AU$9.3m, and paid its CEO total annual compensation worth AU$353k over the year to June 2020. Notably, that's a decrease of 34% over the year before. We note that the salary portion, which stands at AU$285.5k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$284m, the reported median total CEO compensation was AU$440k. From this we gather that Andrew Ronchi is paid around the median for CEOs in the industry. What's more, Andrew Ronchi holds AU$419k worth of shares in the company in their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$285k | AU$390k | 81% |
Other | AU$67k | AU$143k | 19% |
Total Compensation | AU$353k | AU$532k | 100% |
Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. dorsaVi is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
dorsaVi Ltd's Growth
Over the last three years, dorsaVi Ltd has shrunk its earnings per share by 15% per year. In the last year, its revenue is down 20%.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has dorsaVi Ltd Been A Good Investment?
Since shareholders would have lost about 88% over three years, some dorsaVi Ltd investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we noted earlier, dorsaVi pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for dorsaVi you should be aware of, and 2 of them are concerning.
Switching gears from dorsaVi, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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