This article will reflect on the compensation paid to Vittorio Rossi who has served as CEO of Carlo Gavazzi Holding AG (VTX:GAV) since 2009. This analysis will also assess whether Carlo Gavazzi Holding pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Carlo Gavazzi Holding
How Does Total Compensation For Vittorio Rossi Compare With Other Companies In The Industry?
According to our data, Carlo Gavazzi Holding AG has a market capitalization of CHF129m, and paid its CEO total annual compensation worth CHF764k over the year to March 2020. We note that's an increase of 9.1% above last year. We note that the salary portion, which stands at CHF444.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below CHF178m, we found that the median total CEO compensation was CHF272k. This suggests that Vittorio Rossi is paid more than the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | CHF444k | CHF424k | 58% |
| Other | CHF320k | CHF276k | 42% |
| Total Compensation | CHF764k | CHF700k | 100% |
On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. Our data reveals that Carlo Gavazzi Holding allocates salary more or less in line with the wider market. 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.
Carlo Gavazzi Holding AG's Growth
Over the last three years, Carlo Gavazzi Holding AG has shrunk its earnings per share by 19% per year. Its revenue is down 8.2% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Carlo Gavazzi Holding AG Been A Good Investment?
With a three year total loss of 42% for the shareholders, Carlo Gavazzi Holding AG would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Carlo Gavazzi Holding 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. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is potentially serious) in Carlo Gavazzi Holding we think you should know about.
Switching gears from Carlo Gavazzi Holding, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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 SWX:GAV
Carlo Gavazzi Holding
Designs, manufactures, and sells electronic control components for building and industrial automation markets.
Flawless balance sheet second-rate dividend payer.
