Here's Why Shareholders May Want To Be Cautious With Increasing Komax Holding AG's (VTX:KOMN) CEO Pay Packet

Key Insights

• Komax Holding will host its Annual General Meeting on 17th of April
• Total pay for CEO Matijas Meyer includes CHF510.0k salary
• The total compensation is similar to the average for the industry
• Komax Holding's three-year loss to shareholders was 17% while its EPS grew by 42% over the past three years

The underwhelming share price performance of Komax Holding AG (VTX:KOMN) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 17th of April. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Komax Holding

How Does Total Compensation For Matijas Meyer Compare With Other Companies In The Industry?

At the time of writing, our data shows that Komax Holding AG has a market capitalization of CHF928m, and reported total annual CEO compensation of CHF1.0m for the year to December 2023. We note that's a small decrease of 5.6% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF510k.

In comparison with other companies in the Swiss Machinery industry with market capitalizations ranging from CHF365m to CHF1.5b, the reported median CEO total compensation was CHF1.0m. This suggests that Komax Holding remunerates its CEO largely in line with the industry average. What's more, Matijas Meyer holds CHF1.2m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	CHF510k	CHF510k	49%
Other	CHF533k	CHF595k	51%
Total Compensation	CHF1.0m	CHF1.1m	100%

On an industry level, roughly 47% of total compensation represents salary and 53% is other remuneration. Although there is a difference in how total compensation is set, Komax Holding more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Komax Holding AG's Growth Numbers

Komax Holding AG has seen its earnings per share (EPS) increase by 42% a year over the past three years. Its revenue is up 24% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Komax Holding AG Been A Good Investment?

With a three year total loss of 17% for the shareholders, Komax Holding AG would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Komax Holding that investors should think about before committing capital to this stock.

Important note: Komax Holding 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.