Velocity Composites plc's (LON:VEL) CEO Looks Like They Deserve Their Pay Packet

Key Insights

• Velocity Composites will host its Annual General Meeting on 12th of March
• CEO Jon Bridges' total compensation includes salary of UK£178.0k
• The total compensation is similar to the average for the industry
• Velocity Composites' total shareholder return over the past three years was 63% while its EPS grew by 16% over the past three years

It would be hard to discount the role that CEO Jon Bridges has played in delivering the impressive results at Velocity Composites plc (LON:VEL) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 12th of March. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Velocity Composites

Comparing Velocity Composites plc's CEO Compensation With The Industry

At the time of writing, our data shows that Velocity Composites plc has a market capitalization of UK£18m, and reported total annual CEO compensation of UK£202k for the year to October 2023. That's a notable increase of 52% on last year. Notably, the salary which is UK£178.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the British Aerospace & Defense industry with market capitalizations below UK£157m, we found that the median total CEO compensation was UK£198k. From this we gather that Jon Bridges is paid around the median for CEOs in the industry. Furthermore, Jon Bridges directly owns UK£1.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	UK£178k	UK£110k	88%
Other	UK£24k	UK£23k	12%
Total Compensation	UK£202k	UK£133k	100%

Speaking on an industry level, nearly 40% of total compensation represents salary, while the remainder of 60% is other remuneration. Velocity Composites pays out 88% 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.

A Look at Velocity Composites plc's Growth Numbers

Velocity Composites plc has seen its earnings per share (EPS) increase by 16% a year over the past three years. Its revenue is up 37% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Velocity Composites plc Been A Good Investment?

We think that the total shareholder return of 63%, over three years, would leave most Velocity Composites plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.

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 Velocity Composites that investors should think about before committing capital to this stock.

Switching gears from Velocity Composites, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.