Key Insights

• LifeVantage will host its Annual General Meeting on 6th of November
• Total pay for CEO Steve Fife includes US$500.0k salary
• Total compensation is 740% above industry average
• LifeVantage's three-year loss to shareholders was 24% while its EPS was down 38% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at LifeVantage Corporation (NASDAQ:LFVN) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 6th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for LifeVantage

Comparing LifeVantage Corporation's CEO Compensation With The Industry

According to our data, LifeVantage Corporation has a market capitalization of US$99m, and paid its CEO total annual compensation worth US$2.4m over the year to June 2023. Notably, that's an increase of 60% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$500k.

For comparison, other companies in the American Personal Products industry with market capitalizations below US$200m, reported a median total CEO compensation of US$291k. Hence, we can conclude that Steve Fife is remunerated higher than the industry median. Moreover, Steve Fife also holds US$1.9m worth of LifeVantage stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 54% of total compensation represents salary, while the remainder of 46% is other remuneration. LifeVantage pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

LifeVantage Corporation's Growth

LifeVantage Corporation has reduced its earnings per share by 38% a year over the last three years. In the last year, its revenue is up 3.4%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet 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 LifeVantage Corporation Been A Good Investment?

With a three year total loss of 24% for the shareholders, LifeVantage Corporation would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which makes us a bit uncomfortable) in LifeVantage we think you should know about.

Important note: LifeVantage is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.