Here's Why It's Unlikely That Viavi Solutions Inc.'s (NASDAQ:VIAV) CEO Will See A Pay Rise This Year

Key Insights

• Viavi Solutions will host its Annual General Meeting on 8th of November
• Total pay for CEO Oleg Khaykin includes US$895.2k salary
• The overall pay is comparable to the industry average
• Viavi Solutions' three-year loss to shareholders was 39% while its EPS was down 19% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Viavi Solutions Inc. (NASDAQ:VIAV) recently. At the upcoming AGM on 8th of November, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Viavi Solutions

Comparing Viavi Solutions Inc.'s CEO Compensation With The Industry

According to our data, Viavi Solutions Inc. has a market capitalization of US$1.7b, and paid its CEO total annual compensation worth US$9.0m over the year to July 2023. That's slightly lower by 3.9% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$895k.

In comparison with other companies in the American Communications industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$9.0m. So it looks like Viavi Solutions compensates Oleg Khaykin in line with the median for the industry. Moreover, Oleg Khaykin also holds US$8.8m worth of Viavi Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$895k	US$849k	10%
Other	US$8.1m	US$8.5m	90%
Total Compensation	US$9.0m	US$9.3m	100%

Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. In Viavi Solutions' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Viavi Solutions Inc.'s Growth

Viavi Solutions Inc. has reduced its earnings per share by 19% a year over the last three years. It saw its revenue drop 14% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Viavi Solutions Inc. Been A Good Investment?

Few Viavi Solutions Inc. shareholders would feel satisfied with the return of -39% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

Shareholders may want to check for free if Viavi Solutions insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.