Shareholders May Be Wary Of Increasing Van Elle Holdings plc's (LON:VANL) CEO Compensation Package

Shareholders will probably not be too impressed with the underwhelming results at Van Elle Holdings plc (LON:VANL) recently. At the upcoming AGM on 27 September 2021, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Van Elle Holdings

Comparing Van Elle Holdings plc's CEO Compensation With the industry

According to our data, Van Elle Holdings plc has a market capitalization of UK£52m, and paid its CEO total annual compensation worth UK£314k over the year to April 2021. We note that's a decrease of 32% compared to last year. In particular, the salary of UK£273.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under UK£146m, the reported median total CEO compensation was UK£310k. From this we gather that Mark Cutler is paid around the median for CEOs in the industry. Furthermore, Mark Cutler directly owns UK£123k worth of shares in the company.

Component	2021	2020	Proportion (2021)
Salary	UK£273k	UK£280k	87%
Other	UK£41k	UK£185k	13%
Total Compensation	UK£314k	UK£465k	100%

On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. According to our research, Van Elle Holdings has allocated a higher percentage of pay to salary in comparison to the wider 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.

Van Elle Holdings plc's Growth

Van Elle Holdings plc has reduced its earnings per share by 107% a year over the last three years. In the last year, its revenue changed by just 0.006%.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Van Elle Holdings plc Been A Good Investment?

With a total shareholder return of -44% over three years, Van Elle Holdings plc shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Van Elle Holdings that investors should be aware of in a dynamic business environment.

Important note: Van Elle Holdings 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.
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