Key Things To Understand About Versarien's (LON:VRS) CEO Pay Cheque
The CEO of Versarien plc (LON:VRS) is Neill Ricketts, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Versarien pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Versarien
Comparing Versarien plc's CEO Compensation With the industry
According to our data, Versarien plc has a market capitalization of UK£105m, and paid its CEO total annual compensation worth UK£216k over the year to March 2020. That's a fairly small increase of 3.8% over the previous year. We note that the salary portion, which stands at UK£190.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under UK£146m, the reported median total CEO compensation was UK£217k. From this we gather that Neill Ricketts is paid around the median for CEOs in the industry. Moreover, Neill Ricketts also holds UK£7.5m worth of Versarien stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£190k | UK£191k | 88% |
Other | UK£26k | UK£17k | 12% |
Total Compensation | UK£216k | UK£208k | 100% |
Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Versarien is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Versarien plc's Growth Numbers
Over the last three years, Versarien plc has shrunk its earnings per share by 50% per year. Its revenue is down 15% over the previous year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Versarien plc Been A Good Investment?
Given the total shareholder loss of 51% over three years, many shareholders in Versarien plc are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As previously discussed, Neill is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Versarien (1 is a bit concerning!) that you should be aware of before investing here.
Important note: Versarien 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
