It's Unlikely That The CEO Of The Swatch Group AG (VTX:UHR) Will See A Huge Pay Rise This Year

Key Insights

• Swatch Group will host its Annual General Meeting on 8th of May
• Salary of CHF1.50m is part of CEO Nick Hayek's total remuneration
• The total compensation is similar to the average for the industry
• Swatch Group's three-year loss to shareholders was 28% while its EPS grew by 36% over the past three years

Shareholders of The Swatch Group AG (VTX:UHR) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 8th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Swatch Group

How Does Total Compensation For Nick Hayek Compare With Other Companies In The Industry?

At the time of writing, our data shows that The Swatch Group AG has a market capitalization of CHF10.0b, and reported total annual CEO compensation of CHF6.8m for the year to December 2023. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF1.5m.

On comparing similar companies in the Switzerland Luxury industry with market capitalizations above CHF7.4b, we found that the median total CEO compensation was CHF7.1m. So it looks like Swatch Group compensates Nick Hayek in line with the median for the industry. Furthermore, Nick Hayek directly owns CHF9.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CHF1.5m	CHF1.5m	22%
Other	CHF5.3m	CHF5.2m	78%
Total Compensation	CHF6.8m	CHF6.7m	100%

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. It's interesting to note that Swatch Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at The Swatch Group AG's Growth Numbers

The Swatch Group AG has seen its earnings per share (EPS) increase by 36% a year over the past three years. Its revenue is up 5.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Swatch Group AG Been A Good Investment?

With a three year total loss of 28% for the shareholders, The Swatch Group AG would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Swatch Group that investors should be aware of in a dynamic business environment.

Switching gears from Swatch Group, 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. 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.