Ralph Highnam is the CEO of Volpara Health Technologies Limited (ASX:VHT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Ralph Highnam's Compensation Compare With Similar Sized Companies?
According to our data, Volpara Health Technologies Limited has a market capitalization of AU$333m, and pays its CEO total annual compensation worth NZ$422k. (This number is for the twelve months until March 2019). We note that's an increase of 17% above last year. We think total compensation is more important but we note that the CEO salary is lower, at NZ$299k. When we examined a selection of companies with market caps ranging from NZ$158m to NZ$633m, we found the median CEO total compensation was NZ$763k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Volpara Health Technologies has changed from year to year.
Is Volpara Health Technologies Limited Growing?
Over the last three years Volpara Health Technologies Limited has grown its earnings per share (EPS) by an average of 105% per year (using a line of best fit). Its revenue is up 78% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Volpara Health Technologies Limited Been A Good Investment?
Boasting a total shareholder return of 271% over three years, Volpara Health Technologies Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Volpara Health Technologies Limited is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Ralph Highnam deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Volpara Health Technologies (free visualization of insider trades).
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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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.