We Discuss Why Virgin Wines UK PLC's (LON:VINO) CEO Compensation May Be Closely Reviewed

Key Insights

• Virgin Wines UK will host its Annual General Meeting on 23rd of December
• CEO Jay Wright's total compensation includes salary of UK£280.5k
• The overall pay is 79% above the industry average
• Virgin Wines UK's EPS declined by 0.9% over the past three years while total shareholder loss over the past three years was 84%

The results at Virgin Wines UK PLC (LON:VINO) have been quite disappointing recently and CEO Jay Wright bears some responsibility for this. At the upcoming AGM on 23rd of December, 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Virgin Wines UK

How Does Total Compensation For Jay Wright Compare With Other Companies In The Industry?

At the time of writing, our data shows that Virgin Wines UK PLC has a market capitalization of UK£19m, and reported total annual CEO compensation of UK£301k for the year to June 2024. This means that the compensation hasn't changed much from last year. In particular, the salary of UK£280.5k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the British Consumer Retailing industry with market capitalizations below UK£158m, we found that the median total CEO compensation was UK£168k. Accordingly, our analysis reveals that Virgin Wines UK PLC pays Jay Wright north of the industry median. Furthermore, Jay Wright directly owns UK£1.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	UK£281k	UK£275k	93%
Other	UK£20k	UK£20k	7%
Total Compensation	UK£301k	UK£295k	100%

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. It's interesting to note that Virgin Wines UK pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Virgin Wines UK PLC's Growth Numbers

Earnings per share at Virgin Wines UK PLC are much the same as they were three years ago, albeit slightly lower. The trailing twelve months of revenue was pretty much the same as the prior period.

The lack of EPS growth is certainly uninspiring. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Virgin Wines UK PLC Been A Good Investment?

Few Virgin Wines UK PLC shareholders would feel satisfied with the return of -84% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Virgin Wines UK we think you should know about.

Switching gears from Virgin Wines UK, 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.