The CEO of Volt Power Group Limited (ASX:VPR) is Adam Boyd. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Adam Boyd’s Compensation Compare With Similar Sized Companies?
Our data indicates that Volt Power Group Limited is worth AU$18m, and total annual CEO compensation was reported as AU$448k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at AU$360k. We looked at a group of companies with market capitalizations under AU$315m, and the median CEO total compensation was AU$389k.
Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where Volt Power Group stands. Talking in terms of the sector, salary represented approximately 66% of total compensation out of all the companies we analysed, while other remuneration made up 34% of the pie. Volt Power Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
That means Adam Boyd receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance. The graphic below shows how CEO compensation at Volt Power Group has changed from year to year.
Is Volt Power Group Limited Growing?
On average over the last three years, Volt Power Group Limited has seen earnings per share (EPS) move in a favourable direction by 40% each year (using a line of best fit). It saw its revenue drop 32% over the last year.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don’t have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Volt Power Group Limited Been A Good Investment?
With a three year total loss of 96%, Volt Power Group Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
Adam Boyd is paid around what is normal for the leaders of comparable size companies.
We’d say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). 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. Taking a breather from CEO compensation, we’ve spotted 5 warning signs for Volt Power Group (of which 1 makes us a bit uncomfortable!) you should know about in order to have a holistic understanding of the stock.
If you want to buy a stock that is better than Volt Power Group, this free list of high return, low debt companies is a great place to look.
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