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Darren Jensen became the CEO of LifeVantage Corporation (NASDAQ:LFVN) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Darren Jensen’s Compensation Compare With Similar Sized Companies?
Our data indicates that LifeVantage Corporation is worth US$167m, and total annual CEO compensation is US$1.3m. (This is based on the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$550k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.0m.
That means Darren Jensen receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at LifeVantage has changed from year to year.
Is LifeVantage Corporation Growing?
Over the last three years LifeVantage Corporation has grown its earnings per share (EPS) by an average of 6.8% per year (using a line of best fit). Its revenue is up 12% over last year.
I think the revenue growth is good. And the modest growth in earnings per share isn’t bad, either. So while performance isn’t amazing, we think it really does seem quite respectable. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has LifeVantage Corporation Been A Good Investment?
With a total shareholder return of 19% over three years, LifeVantage Corporation shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Darren Jensen is paid around the same as most CEOs of similar size companies.
We see room for improved growth, as well as fairly unremarkable returns over the last three years. While the CEO may not be underpaid, we don’t think the pay is too generous either. Whatever your view on compensation, you might want to check if insiders are buying or selling LifeVantage shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.