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This article will reflect on the compensation paid to Oleg Vornik who has served as CEO of DroneShield Limited (ASX:DRO) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for DroneShield.
Comparing DroneShield Limited's CEO Compensation With the industry
According to our data, DroneShield Limited has a market capitalization of AU$29m, and paid its CEO total annual compensation worth AU$1.1m over the year to December 2019. Notably, that's an increase of 73% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$303k.
In comparison with other companies in the industry with market capitalizations under AU$286m, the reported median total CEO compensation was AU$462k. Accordingly, our analysis reveals that DroneShield Limited pays Oleg Vornik north of the industry median. Moreover, Oleg Vornik also holds AU$457k worth of DroneShield stock directly under their own name.
On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. DroneShield sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at DroneShield Limited's Growth Numbers
DroneShield Limited's earnings per share (EPS) grew 19% per year over the last three years. In the last year, its revenue is up 200%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 DroneShield Limited Been A Good Investment?
With a three year total loss of 50% for the shareholders, DroneShield Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, DroneShield Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed with its earnings per share growth, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 6 warning signs for DroneShield you should be aware of, and 2 of them are a bit concerning.
Important note: DroneShield 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.
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. 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.
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