We Take A Look At Why Velocity Composites plc's (LON:VEL) CEO Compensation Is Well Earned
Key Insights
Velocity Composites to hold its Annual General Meeting on 12th of March
Total pay for CEO Jon Bridges includes UK£178.0k salary
The total compensation is similar to the average for the industry
Velocity Composites' EPS grew by 16% over the past three years while total shareholder return over the past three years was 63%
It would be hard to discount the role that CEO Jon Bridges has played in delivering the impressive results at Velocity Composites plc (LON:VEL) recently. Coming up to the next AGM on 12th of March, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
See our latest analysis for Velocity Composites
How Does Total Compensation For Jon Bridges Compare With Other Companies In The Industry?
At the time of writing, our data shows that Velocity Composites plc has a market capitalization of UK£18m, and reported total annual CEO compensation of UK£202k for the year to October 2023. We note that's an increase of 52% above last year. We note that the salary portion, which stands at UK£178.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the British Aerospace & Defense industry with market capitalizations below UK£157m, we found that the median total CEO compensation was UK£198k. So it looks like Velocity Composites compensates Jon Bridges in line with the median for the industry. What's more, Jon Bridges holds UK£1.8m 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 | UK£178k | UK£110k | 88% |
Other | UK£24k | UK£23k | 12% |
Total Compensation | UK£202k | UK£133k | 100% |
On an industry level, roughly 40% of total compensation represents salary and 60% is other remuneration. According to our research, Velocity Composites has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Velocity Composites plc's Growth
Velocity Composites plc has seen its earnings per share (EPS) increase by 16% a year over the past three years. It achieved revenue growth of 37% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Velocity Composites plc Been A Good Investment?
Most shareholders would probably be pleased with Velocity Composites plc for providing a total return of 63% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Velocity Composites that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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.
