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Should You Worry About Lovisa Holdings Limited's (ASX:LOV) CEO Salary Level?

Simply Wall St

Shane Fallscheer is the CEO of Lovisa Holdings Limited (ASX:LOV). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Lovisa Holdings

How Does Shane Fallscheer's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Lovisa Holdings Limited has a market cap of AU$1.3b, and is paying total annual CEO compensation of AU$1.1m. (This number is for the twelve months until July 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$636k. We looked at a group of companies with market capitalizations from AU$589m to AU$2.4b, and the median CEO total compensation was AU$1.4m.

So Shane Fallscheer is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Lovisa Holdings has changed from year to year.

ASX:LOV CEO Compensation, September 5th 2019

Is Lovisa Holdings Limited Growing?

On average over the last three years, Lovisa Holdings Limited has grown earnings per share (EPS) by 22% each year (using a line of best fit). Its revenue is up 15% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Lovisa Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 362% over three years, Lovisa Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Remuneration for Shane Fallscheer is close enough to the median pay for a CEO of a similar sized company .

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Lovisa Holdings shares (free trial).

If you want to buy a stock that is better than Lovisa Holdings, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.