Here's Why Shareholders May Want To Be Cautious With Increasing LiveHire Limited's (ASX:LVH) CEO Pay Packet

In the past three years, shareholders of LiveHire Limited (ASX:LVH) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 17 November 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for LiveHire

Comparing LiveHire Limited's CEO Compensation With the industry

Our data indicates that LiveHire Limited has a market capitalization of AU$115m, and total annual CEO compensation was reported as AU$558k for the year to June 2021. That's a fairly small increase of 6.3% over the previous year. Notably, the salary which is AU$311.7k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$269m, reported a median total CEO compensation of AU$412k. Hence, we can conclude that Christy Forest is remunerated higher than the industry median. Furthermore, Christy Forest directly owns AU$1.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	AU$312k	AU$310k	56%
Other	AU$246k	AU$214k	44%
Total Compensation	AU$558k	AU$525k	100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. LiveHire sets aside a smaller share of compensation for 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 LiveHire Limited's Growth Numbers

Over the past three years, LiveHire Limited has seen its earnings per share (EPS) grow by 8.5% per year. It achieved revenue growth of 60% over the last year.

It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has LiveHire Limited Been A Good Investment?

With a three year total loss of 13% for the shareholders, LiveHire Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for LiveHire that investors should think about before committing capital to this stock.

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.

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.

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