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

Stefan Szyszkowitz has been the CEO of EVN AG (VIE:EVN) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for EVN

Comparing EVN AG's CEO Compensation With the industry

Our data indicates that EVN AG has a market capitalization of €3.6b, and total annual CEO compensation was reported as €648k for the year to September 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at €426.7k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from €1.7b to €5.3b, we found that the median CEO total compensation was €1.3m. This suggests that Stefan Szyszkowitz is paid below the industry median.

On an industry level, around 57% of total compensation represents salary and 43% is other remuneration. It's interesting to note that EVN pays out a greater portion of remuneration through salary, compared to the 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.

EVN AG's Growth

Over the last three years, EVN AG has shrunk its earnings per share by 7.4% per year. Its revenue is down 4.4% over the previous year.

The decline in EPS is a bit concerning. 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. 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 EVN AG Been A Good Investment?

Most shareholders would probably be pleased with EVN AG for providing a total return of 43% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As previously discussed, Stefan is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. And although the company is suffering from declining EPS growth over the past three years, shareholder returns remain strong. Although we'd like to see positive EPS growth, we'd argue the remuneration is modest, based on our observations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for EVN that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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