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Is VirnetX Holding Corp’s (NYSEMKT:VHC) CEO Being Overpaid?

In 2007 Kendall Larsen was appointed CEO of VirnetX Holding Corp (NYSEMKT:VHC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for VirnetX Holding

How Does Kendall Larsen’s Compensation Compare With Similar Sized Companies?

Our data indicates that VirnetX Holding Corp is worth US$221m, and total annual CEO compensation is US$1m. That’s just a smallish increase of 1.3% on last year. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$919k.

It would therefore appear that VirnetX Holding Corp pays Kendall Larsen more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at VirnetX Holding, below.

AMEX:VHC CEO Compensation November 5th 18

Is VirnetX Holding Corp Growing?

Over the last three years VirnetX Holding Corp has grown its earnings per share (EPS) by an average of 4.9% per year. In the last year, its revenue is down -48%.

I would argue that the lack of revenue growth in the last year is less than ideal, but I’m happy with the EPS growth. It’s hard to reach a conclusion about business performance right now. This may be one to watch.

We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has VirnetX Holding Corp Been A Good Investment?

With a three year total loss of 7.6%, VirnetX Holding Corp would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount VirnetX Holding Corp pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. Shareholders may want to check for free if VirnetX Holding Corp insiders are buying or selling shares.

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.