Andrew Ronchi has been the CEO of dorsaVi Ltd (ASX:DVL) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Andrew Ronchi’s Compensation Compare With Similar Sized Companies?
According to our data, dorsaVi Ltd has a market capitalization of AU$11m, and pays its CEO total annual compensation worth AU$483k. We note that’s an increase of 32% above last year. We examined a group of similar sized companies, with market capitalizations of below AU$278m. The median CEO compensation in that group is AU$360k.
It would therefore appear that dorsaVi Ltd pays Andrew Ronchi more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at dorsaVi, below.
Is dorsaVi Ltd Growing?
dorsaVi Ltd has increased its earnings per share (EPS) by an average of 39% a year, over the last three years In the last year, its revenue changed by just -0.9%.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this free more detailed historical graph of earnings, revenue and cash flow.
Has dorsaVi Ltd Been A Good Investment?
With a three year total loss of 82%, dorsaVi Ltd would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount dorsaVi Ltd pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. This doesn’t look great when you consider CEO remuneration is up on last year. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. Even if a company pays the CEO quite generously, that doesn’t mean it’s a bad investment. Nonetheless, it could be useful to double-check if insiders have sold shares recently.
If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.