Despite strong share price growth of 46% for Volt Information Sciences, Inc. (NYSEMKT:VOLT) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 20 April 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
How Does Total Compensation For Linda Perneau Compare With Other Companies In The Industry?
According to our data, Volt Information Sciences, Inc. has a market capitalization of US$91m, and paid its CEO total annual compensation worth US$1.5m over the year to November 2020. That's a notable decrease of 35% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$688k.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$708k. Accordingly, our analysis reveals that Volt Information Sciences, Inc. pays Linda Perneau north of the industry median. Moreover, Linda Perneau also holds US$911k worth of Volt Information Sciences stock directly under their own name.
Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. Volt Information Sciences pays out 44% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Volt Information Sciences, Inc.'s Growth
Volt Information Sciences, Inc. has reduced its earnings per share by 61% a year over the last three years. Its revenue is down 15% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Volt Information Sciences, Inc. Been A Good Investment?
We think that the total shareholder return of 46%, over three years, would leave most Volt Information Sciences, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
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 2 warning signs for Volt Information Sciences that you should be aware of before investing.
Important note: Volt Information Sciences 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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