Most Shareholders Will Probably Agree With Vysarn Limited's (ASX:VYS) CEO Compensation

CEO James Clement has done a decent job of delivering relatively good performance at Vysarn Limited (ASX:VYS) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 24 November 2022. Here is our take on why we think the CEO compensation looks appropriate.

Our analysis indicates that VYS is potentially undervalued!

Comparing Vysarn Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Vysarn Limited has a market capitalization of AU$32m, and reported total annual CEO compensation of AU$469k for the year to June 2022. That's a notable increase of 19% on last year. In particular, the salary of AU$293.4k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under AU$296m, the reported median total CEO compensation was AU$366k. So it looks like Vysarn compensates James Clement in line with the median for the industry. What's more, James Clement holds AU$1.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	AU$293k	AU$310k	63%
Other	AU$176k	AU$85k	37%
Total Compensation	AU$469k	AU$395k	100%

Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. Vysarn is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Vysarn Limited's Growth Numbers

Over the last three years, Vysarn Limited has shrunk its earnings per share by 18% per year. Its revenue is up 79% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Vysarn Limited Been A Good Investment?

Boasting a total shareholder return of 44% over three years, Vysarn Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The overall company performance has been commendable, however there are still areas for improvement. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Vysarn that investors should think about before committing capital to this stock.

Important note: Vysarn 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. 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.