Is Georg Fischer AG (VTX:FI-N) Overpaying Its CEO?

In 2008 Yves Serra was appointed CEO of Georg Fischer AG (VTX:FI-N). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Georg Fischer

How Does Yves Serra’s Compensation Compare With Similar Sized Companies?

According to our data, Georg Fischer AG has a market capitalization of CHF3.7b, and pays its CEO total annual compensation worth CHF3.2m. (This number is for the twelve months until December 2018). That’s below the compensation, last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CHF950k. When we examined a selection of companies with market caps ranging from CHF2.0b to CHF6.4b, we found the median CEO total compensation was CHF1.6m.

It would therefore appear that Georg Fischer AG pays Yves Serra more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Georg Fischer, below.

SWX:FI-N CEO Compensation, March 30th 2019
SWX:FI-N CEO Compensation, March 30th 2019

Is Georg Fischer AG Growing?

Georg Fischer AG has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). It achieved revenue growth of 10% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Georg Fischer AG Been A Good Investment?

With a total shareholder return of 20% over three years, Georg Fischer AG shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

We compared the total CEO remuneration paid by Georg Fischer AG, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Georg Fischer shares (free trial).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.