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Why Velocity Property Group Limited's (ASX:VP7) CEO Pay Matters To You

Simply Wall St

The CEO of Velocity Property Group Limited (ASX:VP7) is Brendon Ansell. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Velocity Property Group

How Does Brendon Ansell's Compensation Compare With Similar Sized Companies?

According to our data, Velocity Property Group Limited has a market capitalization of AU$5.7m, and paid its CEO total annual compensation worth AU$219k over the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$200k. We examined a group of similar sized companies, with market capitalizations of below AU$309m. The median CEO total compensation in that group is AU$390k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Velocity Property Group stands. On a sector level, around 81% of total compensation represents salary and 19% is other remuneration. So it seems like there isn't a significant difference between Velocity Property Group and the broader market, in terms of salary allocation in the overall compensation package.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at Velocity Property Group, below.

ASX:VP7 CEO Compensation May 14th 2020

Is Velocity Property Group Limited Growing?

Over the last three years Velocity Property Group Limited has shrunk its earnings per share by an average of 65% per year (measured with a line of best fit). In the last year, its revenue is down 16%.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Velocity Property Group Limited Been A Good Investment?

Given the total loss of 92% over three years, many shareholders in Velocity Property Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Velocity Property Group Limited is currently paying its CEO below what is normal for companies of its size.

The compensation paid to Brendon Ansell is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. On another note, Velocity Property Group has 5 warning signs (and 4 which are a bit unpleasant) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.