Stock Analysis

Shareholders Will Probably Not Have Any Issues With Dätwyler Holding AG's (VTX:DAE) CEO Compensation

SWX:DAE
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The share price of Dätwyler Holding AG (VTX:DAE) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 09 March 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Dätwyler Holding

Comparing Dätwyler Holding AG's CEO Compensation With the industry

Our data indicates that Dätwyler Holding AG has a market capitalization of CHF4.7b, and total annual CEO compensation was reported as CHF2.4m for the year to December 2020. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF655k.

For comparison, other companies in the same industry with market capitalizations ranging between CHF3.7b and CHF11b had a median total CEO compensation of CHF1.9m. From this we gather that Dirk Lambrecht is paid around the median for CEOs in the industry. Moreover, Dirk Lambrecht also holds CHF2.4m worth of Dätwyler Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary CHF655k CHF720k 28%
Other CHF1.7m CHF1.7m 72%
Total CompensationCHF2.4m CHF2.4m100%

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. Dätwyler Holding sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
SWX:DAE CEO Compensation March 3rd 2021

Dätwyler Holding AG's Growth

Dätwyler Holding AG has reduced its earnings per share by 1.3% a year over the last three years. It saw its revenue drop 3.9% over the last year.

A lack of EPS improvement is not good to see. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dätwyler Holding AG Been A Good Investment?

Boasting a total shareholder return of 55% over three years, Dätwyler Holding AG has done well by shareholders. 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...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Shareholders may want to check for free if Dätwyler Holding insiders are buying or selling shares.

Important note: Dätwyler 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. 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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