Shareholders may be wondering what CEO Brian Murphy plans to do to improve the less than great performance at NanoVibronix, Inc. (NASDAQ:NAOV) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 15 December 2022. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
Our analysis indicates that NAOV is potentially overvalued!
How Does Total Compensation For Brian Murphy Compare With Other Companies In The Industry?
According to our data, NanoVibronix, Inc. has a market capitalization of US$12m, and paid its CEO total annual compensation worth US$405k over the year to December 2021. We note that’s an increase of 11% above last year. Notably, the salary which is US$231.0k, represents a considerable chunk of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$896k. In other words, NanoVibronix pays its CEO lower than the industry median.
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. According to our research, NanoVibronix has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
NanoVibronix, Inc.’s Growth
Over the past three years, NanoVibronix, Inc. has seen its earnings per share (EPS) grow by 27% per year. Its revenue is up 61% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 NanoVibronix, Inc. Been A Good Investment?
The return of -87% over three years would not have pleased NanoVibronix, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
The loss to shareholders over the past three years is certainly concerning. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 6 warning signs (and 3 which don’t sit too well with us) in NanoVibronix we think you should know about.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether NanoVibronix is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.