We Think Shareholders May Want To Consider A Review Of INOVIQ Ltd's (ASX:IIQ) CEO Compensation Package

Key Insights

• INOVIQ will host its Annual General Meeting on 28th of November
• CEO Leearne Hinch's total compensation includes salary of AU$396.1k
• The overall pay is comparable to the industry average
• INOVIQ's EPS declined by 25% over the past three years while total shareholder loss over the past three years was 13%

The results at INOVIQ Ltd (ASX:IIQ) have been quite disappointing recently and CEO Leearne Hinch bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for INOVIQ

How Does Total Compensation For Leearne Hinch Compare With Other Companies In The Industry?

According to our data, INOVIQ Ltd has a market capitalization of AU$53m, and paid its CEO total annual compensation worth AU$558k over the year to June 2023. That's a notable increase of 15% on last year. Notably, the salary which is AU$396.1k, represents most of the total compensation being paid.

In comparison with other companies in the Australian Healthcare industry with market capitalizations under AU$305m, the reported median total CEO compensation was AU$576k. From this we gather that Leearne Hinch is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	AU$396k	AU$376k	71%
Other	AU$162k	AU$109k	29%
Total Compensation	AU$558k	AU$485k	100%

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 INOVIQ pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at INOVIQ Ltd's Growth Numbers

Over the last three years, INOVIQ Ltd has shrunk its earnings per share by 25% per year. It saw its revenue drop 22% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 INOVIQ Ltd Been A Good Investment?

Given the total shareholder loss of 13% over three years, many shareholders in INOVIQ Ltd are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 2 which are concerning) in INOVIQ we think you should know about.

Switching gears from INOVIQ, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.