Here's Why It's Unlikely That Adval Tech Holding AG's (VTX:ADVN) CEO Will See A Pay Rise This Year

Key Insights

• Adval Tech Holding to hold its Annual General Meeting on 11th of May
• Total pay for CEO René Rothen includes CHF385.2k salary
• Total compensation is 187% above industry average
• Over the past three years, Adval Tech Holding's EPS fell by 49% and over the past three years, the total loss to shareholders 6.5%

Shareholders will probably not be too impressed with the underwhelming results at Adval Tech Holding AG (VTX:ADVN) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 11th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Adval Tech Holding

Comparing Adval Tech Holding AG's CEO Compensation With The Industry

At the time of writing, our data shows that Adval Tech Holding AG has a market capitalization of CHF88m, and reported total annual CEO compensation of CHF612k for the year to December 2022. We note that's a small decrease of 3.4% on last year. We note that the salary portion, which stands at CHF385.2k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Swiss Machinery industry with market capitalizations below CHF177m, reported a median total CEO compensation of CHF213k. Accordingly, our analysis reveals that Adval Tech Holding AG pays René Rothen north of the industry median. Moreover, René Rothen also holds CHF192k worth of Adval Tech Holding stock directly under their own name.

Component	2022	2021	Proportion (2022)
Salary	CHF385k	CHF379k	63%
Other	CHF227k	CHF254k	37%
Total Compensation	CHF612k	CHF634k	100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Adval Tech Holding pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Adval Tech Holding AG's Growth

Adval Tech Holding AG has reduced its earnings per share by 49% a year over the last three years. In the last year, its revenue is up 7.3%.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Adval Tech Holding AG Been A Good Investment?

Given the total shareholder loss of 6.5% over three years, many shareholders in Adval Tech Holding AG are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Adval Tech Holding that you should be aware of before investing.

Important note: Adval Tech 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.