Yahoo Finance Is Vortiv Limited's (ASX:VOR) CEO Overpaid Relative To Its Peers?
In 2017 Jeff Lai was appointed CEO of Vortiv Limited (ASX:VOR). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Vortiv
How Does Jeff Lai's Compensation Compare With Similar Sized Companies?
According to our data, Vortiv Limited has a market capitalization of AU$25m, and paid its CEO total annual compensation worth AU$284k over the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at AU$183k. We examined a group of similar sized companies, with market capitalizations of below AU$293m. The median CEO total compensation in that group is AU$382k.
So Jeff Lai receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Vortiv has changed from year to year.
Is Vortiv Limited Growing?
On average over the last three years, Vortiv Limited has grown earnings per share (EPS) by 111% each year (using a line of best fit). It achieved revenue growth of 90% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Vortiv Limited Been A Good Investment?
Given the total loss of 62% over three years, many shareholders in Vortiv Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Jeff Lai is paid around the same as most CEOs of similar size companies.
We'd say the company can boast of its EPS growth, but we find the returns over the last three years to be lacking. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Vortiv (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
