How Should Investors React To FACC's (VIE:FACC) CEO Pay?

This article will reflect on the compensation paid to Robert Machtlinger who has served as CEO of FACC AG (VIE:FACC) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for FACC

How Does Total Compensation For Robert Machtlinger Compare With Other Companies In The Industry?

At the time of writing, our data shows that FACC AG has a market capitalization of €255m, and reported total annual CEO compensation of €598k for the year to December 2019. Notably, that's an increase of 23% over the year before. Notably, the salary which is €332.0k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between €169m and €676m, we discovered that the median CEO total compensation of that group was €611k. This suggests that FACC remunerates its CEO largely in line with the industry average.

Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. It's interesting to note that FACC pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

FACC AG's Growth

Over the last three years, FACC AG has shrunk its earnings per share by 30% per year. In the last year, its revenue is down 12%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. 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 FACC AG Been A Good Investment?

Since shareholders would have lost about 44% over three years, some FACC AG investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, FACC AG is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for FACC (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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. 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.
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