Here's Why Shareholders Will Not Be Complaining About Venture Life Group plc's (LON:VLG) CEO Pay Packet

We have been pretty impressed with the performance at Venture Life Group plc (LON:VLG) recently and CEO Jerry Randall deserves a mention for their role in it. Coming up to the next AGM on 20 May 2021, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Venture Life Group

How Does Total Compensation For Jerry Randall Compare With Other Companies In The Industry?

According to our data, Venture Life Group plc has a market capitalization of UK£105m, and paid its CEO total annual compensation worth UK£440k over the year to December 2020. Notably, that's an increase of 29% over the year before. We note that the salary portion, which stands at UK£278.9k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below UK£143m, reported a median total CEO compensation of UK£358k. This suggests that Venture Life Group remunerates its CEO largely in line with the industry average. Moreover, Jerry Randall also holds UK£1.6m worth of Venture Life Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	UK£279k	UK£271k	63%
Other	UK£161k	UK£72k	37%
Total Compensation	UK£440k	UK£342k	100%

On an industry level, roughly 44% of total compensation represents salary and 56% is other remuneration. Venture Life Group pays out 63% 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.

Venture Life Group plc's Growth

Over the past three years, Venture Life Group plc has seen its earnings per share (EPS) grow by 111% per year. In the last year, its revenue is up 49%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Venture Life Group plc Been A Good Investment?

Most shareholders would probably be pleased with Venture Life Group plc for providing a total return of 90% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Venture Life Group you should be aware of, and 1 of them can't be ignored.

Switching gears from Venture Life Group, 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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