The CEO of Vectus Biosystems Limited (ASX:VBS) is Karen Duggan, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Vectus Biosystems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Vectus Biosystems
Comparing Vectus Biosystems Limited's CEO Compensation With the industry
According to our data, Vectus Biosystems Limited has a market capitalization of AU$38m, and paid its CEO total annual compensation worth AU$230k over the year to June 2020. Notably, that's a decrease of 9.0% over the year before. Notably, the salary which is AU$196.5k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below AU$260m, we found that the median total CEO compensation was AU$408k. That is to say, Karen Duggan is paid under the industry median. Furthermore, Karen Duggan directly owns AU$3.8m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$196k | AU$183k | 85% |
| Other | AU$33k | AU$69k | 15% |
| Total Compensation | AU$230k | AU$253k | 100% |
Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Vectus Biosystems 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.
Vectus Biosystems Limited's Growth
Over the past three years, Vectus Biosystems Limited has seen its earnings per share (EPS) grow by 16% per year. Its revenue is up 23,166% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Vectus Biosystems Limited Been A Good Investment?
Given the total shareholder loss of 11% over three years, many shareholders in Vectus Biosystems Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we noted earlier, Vectus Biosystems pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However we must not forget that the EPS growth has been very strong over three years. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But shareholders will likely want to hold off on any raise for Karen until investor returns are positive.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Vectus Biosystems you should be aware of, and 2 of them are a bit unpleasant.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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:VBS
Vectus Biosystems
Engages in the medical research and development activities in Australia.
Moderate with adequate balance sheet.
