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Is Australian Vanadium Limited (ASX:AVL) Excessively Paying Its CEO?

Yolanda Lovett

Vincent Algar became the CEO of Australian Vanadium Limited (ASX:AVL) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Australian Vanadium

How Does Vincent Algar’s Compensation Compare With Similar Sized Companies?

Our data indicates that Australian Vanadium Limited is worth AU$36m, and total annual CEO compensation is AU$467k. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at AU$240k. We took a group of companies with market capitalizations below AU$284m, and calculated the median CEO compensation to be AU$368k.

So Vincent Algar is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Australian Vanadium, below.

ASX:AVL CEO Compensation January 1st 19

Is Australian Vanadium Limited Growing?

Over the last three years Australian Vanadium Limited has grown its earnings per share (EPS) by an average of 14% per year. It achieved revenue growth of 20% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

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 Australian Vanadium Limited Been A Good Investment?

I think that the total shareholder return of 159%, over three years, would leave most Australian Vanadium Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Vincent Algar is paid around what is normal the leaders of comparable size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Australian Vanadium shares (free trial).

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.