Advertisement
UK markets closed
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • FTSE 250

    19,884.73
    +74.07 (+0.37%)
     
  • AIM

    743.26
    +1.15 (+0.15%)
     
  • GBP/EUR

    1.1710
    +0.0016 (+0.14%)
     
  • GBP/USD

    1.2629
    +0.0007 (+0.05%)
     
  • Bitcoin GBP

    55,987.52
    +894.25 (+1.62%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • NIKKEI 225

    40,324.25
    +156.18 (+0.39%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • CAC 40

    8,205.81
    +1.00 (+0.01%)
     

We Think Shareholders May Want To Consider A Review Of Vivo Energy plc's (LON:VVO) CEO Compensation Package

Shareholders will probably not be too impressed with the underwhelming results at Vivo Energy plc (LON:VVO) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 18 May 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Vivo Energy

How Does Total Compensation For Christian Chammas Compare With Other Companies In The Industry?

At the time of writing, our data shows that Vivo Energy plc has a market capitalization of UK£1.4b, and reported total annual CEO compensation of US$2.4m for the year to December 2020. That's a slight decrease of 7.8% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$874k.

ADVERTISEMENT

For comparison, other companies in the same industry with market capitalizations ranging between UK£706m and UK£2.3b had a median total CEO compensation of US$2.3m. From this we gather that Christian Chammas is paid around the median for CEOs in the industry. What's more, Christian Chammas holds UK£7.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$874k

US$848k

37%

Other

US$1.5m

US$1.7m

63%

Total Compensation

US$2.4m

US$2.6m

100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Vivo Energy sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Vivo Energy plc's Growth Numbers

Over the last three years, Vivo Energy plc has shrunk its earnings per share by 89% per year. Its revenue is down 17% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Vivo Energy plc Been A Good Investment?

Few Vivo Energy plc shareholders would feel satisfied with the return of -37% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 4 warning signs for Vivo Energy that investors should look into moving forward.

Switching gears from Vivo Energy, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.