There Could Be A Chance Velocity Composites plc's (LON:VEL) CEO Will Have Their Compensation Increased

Key Insights

• Velocity Composites' Annual General Meeting to take place on 28th of February
• Salary of UK£110.0k is part of CEO Jon Bridges's total remuneration
• The overall pay is 33% below the industry average
• Velocity Composites' EPS grew by 2.2% over the past three years while total shareholder return over the past three years was 27%

The decent performance at Velocity Composites plc (LON:VEL) recently will please most shareholders as they go into the AGM coming up on 28th of February. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

View our latest analysis for Velocity Composites

How Does Total Compensation For Jon Bridges Compare With Other Companies In The Industry?

At the time of writing, our data shows that Velocity Composites plc has a market capitalization of UK£16m, and reported total annual CEO compensation of UK£133k for the year to October 2022. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at UK£110.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the British Aerospace & Defense industry with market capitalizations below UK£165m, we found that the median total CEO compensation was UK£199k. That is to say, Jon Bridges is paid under the industry median. Furthermore, Jon Bridges directly owns UK£2.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	UK£110k	UK£116k	83%
Other	UK£23k	UK£15k	17%
Total Compensation	UK£133k	UK£131k	100%

Talking in terms of the industry, salary represented approximately 36% of total compensation out of all the companies we analyzed, while other remuneration made up 64% of the pie. Velocity Composites pays out 83% of remuneration in the form of a salary, significantly higher than the industry average. 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.

Velocity Composites plc's Growth

Over the past three years, Velocity Composites plc has seen its earnings per share (EPS) grow by 2.2% per year. In the last year, its revenue is up 22%.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 Velocity Composites plc Been A Good Investment?

Velocity Composites plc has served shareholders reasonably well, with a total return of 27% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Velocity Composites you should be aware of, and 1 of them is 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. 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.