It Looks Like LifeVantage Corporation's (NASDAQ:LFVN) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• LifeVantage will host its Annual General Meeting on 6th of November
• CEO Steve Fife's total compensation includes salary of US$500.0k
• The overall pay is 740% above the industry average
• LifeVantage's EPS declined by 38% over the past three years while total shareholder loss over the past three years was 24%

The results at LifeVantage Corporation (NASDAQ:LFVN) have been quite disappointing recently and CEO Steve Fife bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 6th of November. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for LifeVantage

Comparing LifeVantage Corporation's CEO Compensation With The Industry

Our data indicates that LifeVantage Corporation has a market capitalization of US$99m, and total annual CEO compensation was reported as US$2.4m for the year to June 2023. We note that's an increase of 60% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$500k.

In comparison with other companies in the American Personal Products industry with market capitalizations under US$200m, the reported median total CEO compensation was US$291k. This suggests that Steve Fife is paid more than the median for the industry. What's more, Steve Fife holds US$1.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$500k	US$500k	20%
Other	US$1.9m	US$1.0m	80%
Total Compensation	US$2.4m	US$1.5m	100%

On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. In LifeVantage's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at LifeVantage Corporation's Growth Numbers

Over the last three years, LifeVantage Corporation has shrunk its earnings per share by 38% per year. It achieved revenue growth of 3.4% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet 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 LifeVantage Corporation Been A Good Investment?

Given the total shareholder loss of 24% over three years, many shareholders in LifeVantage Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for LifeVantage you should be aware of, and 1 of them shouldn't be ignored.

Switching gears from LifeVantage, 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.