Key Insights
- Viavi Solutions will host its Annual General Meeting on 8th of November
- Total pay for CEO Oleg Khaykin includes US$895.2k salary
- The total compensation is similar to the average for the industry
- Over the past three years, Viavi Solutions' EPS fell by 19% and over the past three years, the total loss to shareholders 39%
The results at Viavi Solutions Inc. (NASDAQ:VIAV) have been quite disappointing recently and CEO Oleg Khaykin bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 8th of November. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.
See our latest analysis for Viavi Solutions
Comparing Viavi Solutions Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Viavi Solutions Inc. has a market capitalization of US$1.7b, and reported total annual CEO compensation of US$9.0m for the year to July 2023. We note that's a small decrease of 3.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$895k.
On comparing similar companies from the American Communications industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$9.0m. So it looks like Viavi Solutions compensates Oleg Khaykin in line with the median for the industry. What's more, Oleg Khaykin holds US$8.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | US$895k | US$849k | 10% |
| Other | US$8.1m | US$8.5m | 90% |
| Total Compensation | US$9.0m | US$9.3m | 100% |
On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Viavi Solutions pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Viavi Solutions Inc.'s Growth
Viavi Solutions Inc. has reduced its earnings per share by 19% a year over the last three years. It saw its revenue drop 14% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Viavi Solutions Inc. Been A Good Investment?
With a total shareholder return of -39% over three years, Viavi Solutions Inc. shareholders would by and large be disappointed. 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.
Shareholders may want to check for free if Viavi Solutions insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.