We Discuss Why Adecco Group AG's (VTX:ADEN) CEO Compensation May Be Closely Reviewed

Key Insights

• Adecco Group to hold its Annual General Meeting on 17th of April
• Total pay for CEO Denis Machuel includes €1.38m salary
• Total compensation is similar to the industry average
• Adecco Group's three-year loss to shareholders was 32% while its EPS was down 21% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Adecco Group AG (VTX:ADEN) recently. At the upcoming AGM on 17th of April, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Adecco Group

Comparing Adecco Group AG's CEO Compensation With The Industry

According to our data, Adecco Group AG has a market capitalization of CHF3.6b, and paid its CEO total annual compensation worth €5.4m over the year to December 2024. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.4m.

On examining similar-sized companies in the Switzerland Professional Services industry with market capitalizations between CHF1.6b and CHF5.3b, we discovered that the median CEO total compensation of that group was €5.2m. From this we gather that Denis Machuel is paid around the median for CEOs in the industry. Furthermore, Denis Machuel directly owns CHF195k worth of shares in the company.

Component	2024	2023	Proportion (2024)
Salary	€1.4m	€1.4m	26%
Other	€4.0m	€3.9m	74%
Total Compensation	€5.4m	€5.3m	100%

Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. In Adecco Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Adecco Group AG's Growth Numbers

Over the last three years, Adecco Group AG has shrunk its earnings per share by 21% per year. It saw its revenue drop 3.4% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future .

Has Adecco Group AG Been A Good Investment?

The return of -32% over three years would not have pleased Adecco Group AG shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 3 warning signs for Adecco Group that investors should be aware of in a dynamic business environment.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.