Should Shareholders Reconsider Picanol nv's (EBR:PIC) CEO Compensation Package?
The results at Picanol nv (EBR:PIC) have been quite disappointing recently and CEO Luc Tack bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 17 May 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.
View our latest analysis for Picanol
Comparing Picanol nv's CEO Compensation With the industry
Our data indicates that Picanol nv has a market capitalization of €1.4b, and total annual CEO compensation was reported as €1.4m for the year to December 2020. Notably, that's a decrease of 17% over the year before. We note that the salary of €748.0k makes up a sizeable portion of the total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between €822m and €2.6b, we discovered that the median CEO total compensation of that group was €997k. This suggests that Luc Tack is paid more than the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | €748k | €716k | 53% |
| Other | €654k | €964k | 47% |
| Total Compensation | €1.4m | €1.7m | 100% |
Speaking on an industry level, nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. Picanol is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.
Picanol nv's Growth
Over the last three years, Picanol nv has shrunk its earnings per share by 18% per year. In the last year, its revenue is down 1.5%.
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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Picanol nv Been A Good Investment?
With a three year total loss of 17% for the shareholders, Picanol nv would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 one thing, but it is also interesting to check if the CEO is buying or selling Picanol (free visualization of insider trades).
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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About ENXTBR:PIC
Picanol
Picanol nv, together with its subsidiaries, engages in the mechanical engineering, agriculture, food, energy, water management, natural resources, and other industrial businesses in Belgium and internationally.
Excellent balance sheet with solid track record.
