Oleg Vornik has been the CEO of DroneShield Limited (ASX:DRO) since 2017, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also assess whether DroneShield pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing DroneShield Limited’s CEO Compensation With the industry
According to our data, DroneShield Limited has a market capitalization of AU$43m, and paid its CEO total annual compensation worth AU$1.1m over the year to December 2019. Notably, that’s an increase of 73% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$303k.
For comparison, other companies in the industry with market capitalizations below AU$279m, reported a median total CEO compensation of AU$461k. Accordingly, our analysis reveals that DroneShield Limited pays Oleg Vornik north of the industry median. What’s more, Oleg Vornik holds AU$655k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. It’s interesting to note that DroneShield allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.
A Look at DroneShield Limited’s Growth Numbers
Over the past three years, DroneShield Limited has seen its earnings per share (EPS) grow by 19% per year. Its revenue is up 200% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 DroneShield Limited Been A Good Investment?
With a three year total loss of 31% for the shareholders, DroneShield Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, DroneShield pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the earnings per share growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we don’t think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
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. We identified 7 warning signs for DroneShield (2 are a bit concerning!) that you should be aware of before investing here.
Important note: DroneShield 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.
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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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