Here's Why Shareholders Should Examine OC Oerlikon Corporation AG's (VTX:OERL) CEO Compensation Package More Closely

Shareholders will probably not be too impressed with the underwhelming results at OC Oerlikon Corporation AG (VTX:OERL) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 13 April 2021. 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 OC Oerlikon

How Does Total Compensation For Roland Fischer Compare With Other Companies In The Industry?

Our data indicates that OC Oerlikon Corporation AG has a market capitalization of CHF3.6b, and total annual CEO compensation was reported as CHF3.3m for the year to December 2020. We note that's a small decrease of 8.0% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF1.0m.

On examining similar-sized companies in the industry with market capitalizations between CHF1.9b and CHF6.0b, we discovered that the median CEO total compensation of that group was CHF2.1m. Hence, we can conclude that Roland Fischer is remunerated higher than the industry median. What's more, Roland Fischer holds CHF2.4m worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	CHF1.0m	CHF1.0m	30%
Other	CHF2.3m	CHF2.6m	70%
Total Compensation	CHF3.3m	CHF3.6m	100%

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. OC Oerlikon 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.

OC Oerlikon Corporation AG's Growth

Over the last three years, OC Oerlikon Corporation AG has shrunk its earnings per share by 27% per year. In the last year, its revenue is down 13%.

Few shareholders would be pleased to read that EPS have declined. 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 OC Oerlikon Corporation AG Been A Good Investment?

Since shareholders would have lost about 8.6% over three years, some OC Oerlikon Corporation AG investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for OC Oerlikon that investors should be aware of in a dynamic business environment.

Switching gears from OC Oerlikon, 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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