Does Rieter Holding's (VTX:RIEN) CEO Salary Compare Well With Industry Peers?

Norbert Klapper has been the CEO of Rieter Holding AG (VTX:RIEN) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Rieter Holding pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Rieter Holding

Comparing Rieter Holding AG's CEO Compensation With the industry

At the time of writing, our data shows that Rieter Holding AG has a market capitalization of CHF429m, and reported total annual CEO compensation of CHF1.1m for the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary which is CHF650.0k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between CHF178m and CHF713m, we discovered that the median CEO total compensation of that group was CHF822k. This suggests that Norbert Klapper is paid more than the median for the industry. Moreover, Norbert Klapper also holds CHF479k worth of Rieter Holding stock directly under their own name.

On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. It's interesting to note that Rieter Holding pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Rieter Holding AG's Growth

Over the last three years, Rieter Holding AG has shrunk its earnings per share by 65% per year. Its revenue is down 39% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Rieter Holding AG Been A Good Investment?

With a three year total loss of 53% for the shareholders, Rieter Holding AG would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Rieter Holding AG is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Rieter Holding (2 can't be ignored!) that you should be aware of before investing here.

Important note: Rieter 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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