Neil Stothard is the CEO of Vp plc (LON:VP.), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. 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 Vp
How Does Total Compensation For Neil Stothard Compare With Other Companies In The Industry?
Our data indicates that Vp plc has a market capitalization of UK£318m, and total annual CEO compensation was reported as UK£699k for the year to March 2020. Notably, that's a decrease of 45% over the year before. In particular, the salary of UK£366.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from UK£144m to UK£575m, we found that the median CEO total compensation was UK£689k. So it looks like Vp compensates Neil Stothard in line with the median for the industry. Furthermore, Neil Stothard directly owns UK£6.7m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | UK£366k | UK£359k | 52% |
| Other | UK£333k | UK£911k | 48% |
| Total Compensation | UK£699k | UK£1.3m | 100% |
On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. Vp is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Vp plc's Growth Numbers
Vp plc has reduced its earnings per share by 34% a year over the last three years. In the last year, its revenue is down 15%.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Vp plc Been A Good Investment?
Given the total shareholder loss of 0.7% over three years, many shareholders in Vp plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we touched on above, Vp plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Vp that you should be aware of before investing.
Switching gears from Vp, 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. 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 LSE:VP.
Vp
Provides equipment rental and associated services in the United Kingdom and internationally.
Good value with adequate balance sheet and pays a dividend.
