We Think The Compensation For Nanoveu Limited's (ASX:NVU) CEO Looks About Right

Key Insights

• Nanoveu's Annual General Meeting to take place on 31st of May
• Salary of AU$242.8k is part of CEO Alfred Chong's total remuneration
• The overall pay is 35% below the industry average
• Over the past three years, Nanoveu's EPS grew by 23% and over the past three years, the total loss to shareholders 69%

The performance at Nanoveu Limited (ASX:NVU) has been rather lacklustre of late and shareholders may be wondering what CEO Alfred Chong is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 31st of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for Nanoveu

How Does Total Compensation For Alfred Chong Compare With Other Companies In The Industry?

Our data indicates that Nanoveu Limited has a market capitalization of AU$8.0m, and total annual CEO compensation was reported as AU$281k for the year to December 2023. Notably, that's an increase of 52% over the year before. In particular, the salary of AU$242.8k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Australian Electronic industry with market capitalizations below AU$302m, reported a median total CEO compensation of AU$432k. Accordingly, Nanoveu pays its CEO under the industry median. Moreover, Alfred Chong also holds AU$780k worth of Nanoveu stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$243k	AU$184k	86%
Other	AU$38k	AU$542	14%
Total Compensation	AU$281k	AU$185k	100%

Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% of the pie. Nanoveu pays out 86% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Nanoveu Limited's Growth

Nanoveu Limited's earnings per share (EPS) grew 23% per year over the last three years. It saw its revenue drop 36% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Nanoveu Limited Been A Good Investment?

The return of -69% over three years would not have pleased Nanoveu Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 4 which are concerning) in Nanoveu we think you should know about.

Important note: Nanoveu 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.