In 2015 Greg Poux-Guillaume was appointed CEO of Sulzer Ltd (VTX:SUN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Greg Poux-Guillaume’s Compensation Compare With Similar Sized Companies?
Our data indicates that Sulzer Ltd is worth CHF3.3b, and total annual CEO compensation is CHF5.8m. (This figure is for the year to December 2018). We note that’s an increase of 34% above last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CHF1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CHF2.0b to CHF6.5b. The median total CEO compensation was CHF1.7m.
As you can see, Greg Poux-Guillaume is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Sulzer Ltd is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Sulzer has changed from year to year.
Is Sulzer Ltd Growing?
Sulzer Ltd has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). It achieved revenue growth of 10% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Sulzer Ltd Been A Good Investment?
Sulzer Ltd has served shareholders reasonably well, with a total return of 25% over three years. 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.
We compared total CEO remuneration at Sulzer Ltd with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sulzer (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org. 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.