Why Bobst Group's (VTX:BOBNN) CEO Pay Matters

This article will reflect on the compensation paid to Jean-Pascal Bobst who has served as CEO of Bobst Group SA (VTX:BOBNN) since 2009. 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 Bobst Group

How Does Total Compensation For Jean-Pascal Bobst Compare With Other Companies In The Industry?

Our data indicates that Bobst Group SA has a market capitalization of CHF846m, and total annual CEO compensation was reported as CHF1.6m for the year to December 2019. That's just a smallish increase of 3.2% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF682k.

On comparing similar companies from the same industry with market caps ranging from CHF356m to CHF1.4b, we found that the median CEO total compensation was CHF1.1m. This suggests that Jean-Pascal Bobst is paid more than the median for the industry. What's more, Jean-Pascal Bobst holds CHF1.0m worth of shares in the company in their own name.

On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. Bobst Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Bobst Group SA's Growth Numbers

Bobst Group SA has reduced its earnings per share by 32% a year over the last three years. It saw its revenue drop 11% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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 Bobst Group SA Been A Good Investment?

Given the total shareholder loss of 57% over three years, many shareholders in Bobst Group SA are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Bobst Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Bobst Group we think you should know about.

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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