How Is Vianet Group's (LON:VNET) CEO Paid Relative To Peers?

Stewart Darling became the CEO of Vianet Group plc (LON:VNET) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Vianet Group.

See our latest analysis for Vianet Group

How Does Total Compensation For Stewart Darling Compare With Other Companies In The Industry?

At the time of writing, our data shows that Vianet Group plc has a market capitalization of UK£22m, and reported total annual CEO compensation of UK£301k for the year to March 2020. We note that's an increase of 24% above last year. Notably, the salary which is UK£289.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below UK£143m, we found that the median total CEO compensation was UK£228k. This suggests that Stewart Darling is paid more than the median for the industry. What's more, Stewart Darling holds UK£156k worth of shares in the company in their own name.

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Vianet Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Vianet Group plc's Growth

Vianet Group plc has reduced its earnings per share by 8.0% a year over the last three years. It saw its revenue drop 27% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Vianet Group plc Been A Good Investment?

With a three year total loss of 38% for the shareholders, Vianet Group plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Vianet Group pays its CEO a majority of compensation through a salary. As we noted earlier, Vianet Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Vianet Group that investors should look into moving forward.

Important note: Vianet Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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