We Think Shareholders May Want To Consider A Review Of Zumtobel Group AG's (VIE:ZAG) CEO Compensation Package

Key Insights

• Zumtobel Group will host its Annual General Meeting on 2nd of August
• Total pay for CEO Alfred Felder includes €700.0k salary
• The total compensation is 128% higher than the average for the industry
• Over the past three years, Zumtobel Group's EPS fell by 18% and over the past three years, the total loss to shareholders 28%

Zumtobel Group AG (VIE:ZAG) has not performed well recently and CEO Alfred Felder will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 2nd of August. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Zumtobel Group

How Does Total Compensation For Alfred Felder Compare With Other Companies In The Industry?

Our data indicates that Zumtobel Group AG has a market capitalization of €243m, and total annual CEO compensation was reported as €1.5m for the year to April 2024. We note that's a small decrease of 6.4% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €700k.

On examining similar-sized companies in the Austria Electrical industry with market capitalizations between €92m and €368m, we discovered that the median CEO total compensation of that group was €649k. Accordingly, our analysis reveals that Zumtobel Group AG pays Alfred Felder north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	€700k	€700k	47%
Other	€779k	€880k	53%
Total Compensation	€1.5m	€1.6m	100%

On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. Zumtobel Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Zumtobel Group AG's Growth Numbers

Over the last three years, Zumtobel Group AG has shrunk its earnings per share by 18% per year. It saw its revenue drop 6.8% over the last year.

Overall this is not a very positive result for shareholders. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Zumtobel Group AG Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in Zumtobel Group AG are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too 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 compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Zumtobel Group that you should be aware of before investing.

Switching gears from Zumtobel Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com