This article will reflect on the compensation paid to Mark Miocevich who has served as CEO of VEEM Ltd (ASX:VEE) since 1995. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for VEEM
How Does Total Compensation For Mark Miocevich Compare With Other Companies In The Industry?
According to our data, VEEM Ltd has a market capitalization of AU$98m, and paid its CEO total annual compensation worth AU$415k over the year to June 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at AU$385.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$263m, the reported median total CEO compensation was AU$351k. So it looks like VEEM compensates Mark Miocevich in line with the median for the industry. What's more, Mark Miocevich holds AU$70m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$385k | AU$391k | 93% |
| Other | AU$30k | AU$31k | 7% |
| Total Compensation | AU$415k | AU$422k | 100% |
On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. VEEM 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.
A Look at VEEM Ltd's Growth Numbers
Over the last three years, VEEM Ltd has shrunk its earnings per share by 16% per year. In the last year, its revenue is down 1.3%.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has VEEM Ltd Been A Good Investment?
Boasting a total shareholder return of 81% over three years, VEEM Ltd has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
As we touched on above, VEEM Ltd is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good when you see that EPS growth over the last three years has been negative. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We're not saying CEO compensation is too generous, but shrinking EPS is undoubtedly an issue that will have to be addressed.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for VEEM that investors should be aware of in a dynamic business environment.
Switching gears from VEEM, 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.
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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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About ASX:VEE
VEEM
Engages in the design, manufacture, and sale of marine propulsion and stabilization systems.
Flawless balance sheet with solid track record.
