The CEO of Volt Power Group Limited (ASX:VPR) is Adam Boyd, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Volt Power Group
Comparing Volt Power Group Limited's CEO Compensation With the industry
Our data indicates that Volt Power Group Limited has a market capitalization of AU$18m, and total annual CEO compensation was reported as AU$385k for the year to December 2019. Notably, that's a decrease of 14% over the year before. We note that the salary portion, which stands at AU$360.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$273m, reported a median total CEO compensation of AU$245k. Accordingly, our analysis reveals that Volt Power Group Limited pays Adam Boyd north of the industry median. What's more, Adam Boyd holds AU$3.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | AU$360k | AU$360k | 93% |
| Other | AU$25k | AU$88k | 7% |
| Total Compensation | AU$385k | AU$448k | 100% |
On an industry level, around 91% of total compensation represents salary and 8.7% is other remuneration. Although there is a difference in how total compensation is set, Volt Power Group more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Volt Power Group Limited's Growth
Volt Power Group Limited has reduced its earnings per share by 95% a year over the last three years. In the last year, its revenue is down 40%.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Volt Power Group Limited Been A Good Investment?
With a three year total loss of 50% for the shareholders, Volt Power Group Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Volt Power Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Volt Power Group (1 is significant!) that you should be aware of before investing here.
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:VPR
Volt Group
Engages in the development and commercialization of power generation and hydrogen production technology solutions, and mining equipment in Australia.
Flawless balance sheet with acceptable track record.
