Does dorsaVi Ltd’s (ASX:DVL) CEO Pay Reflect Performance?
Andrew Ronchi became the CEO of dorsaVi Ltd (ASX:DVL) in 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. 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.
Check out our latest analysis for dorsaVi
How Does Andrew Ronchi’s Compensation Compare With Similar Sized Companies?
Our data indicates that dorsaVi Ltd is worth AU$9.1m, and total annual CEO compensation is AU$483k. (This is based on the year to 2018). That’s a notable increase of 32% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$343k. We took a group of companies with market capitalizations below AU$277m, and calculated the median CEO compensation to be AU$363k.
As you can see, Andrew Ronchi is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean dorsaVi Ltd is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at dorsaVi has changed over time.
Is dorsaVi Ltd Growing?
On average over the last three years, dorsaVi Ltd has grown earnings per share (EPS) by 39% each year. In the last year, its revenue changed by just -0.9%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important.
Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has dorsaVi Ltd Been A Good Investment?
Given the total loss of 84% over three years, many shareholders in dorsaVi Ltd 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…
We examined the amount dorsaVi Ltd pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. So shareholders might not feel great about the fact that CEO pay increased on last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying dorsaVi shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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.
