It's Unlikely That Orascom Development Holding AG's (VTX:ODHN) CEO Will See A Huge Pay Rise This Year

Key Insights

• Orascom Development Holding will host its Annual General Meeting on 13th of May
• CEO Omar El Hamamsy's total compensation includes salary of CHF1.62m
• The total compensation is 339% higher than the average for the industry
• Over the past three years, Orascom Development Holding's EPS grew by 108% and over the past three years, the total loss to shareholders 59%

The underwhelming share price performance of Orascom Development Holding AG (VTX:ODHN) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 13th 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. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Orascom Development Holding

Comparing Orascom Development Holding AG's CEO Compensation With The Industry

According to our data, Orascom Development Holding AG has a market capitalization of CHF251m, and paid its CEO total annual compensation worth CHF2.8m over the year to December 2023. That's a modest increase of 3.9% on the prior year. In particular, the salary of CHF1.62m, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the Switzerland Hospitality industry with market caps ranging from CHF91m to CHF363m, we found that the median CEO total compensation was CHF627k. Accordingly, our analysis reveals that Orascom Development Holding AG pays Omar El Hamamsy north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	CHF1.6m	CHF1.6m	59%
Other	CHF1.1m	CHF1.1m	41%
Total Compensation	CHF2.8m	CHF2.6m	100%

Talking in terms of the industry, salary represented approximately 51% of total compensation out of all the companies we analyzed, while other remuneration made up 49% of the pie. Orascom Development Holding is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Orascom Development Holding AG's Growth Numbers

Orascom Development Holding AG's earnings per share (EPS) grew 108% per year over the last three years. Its revenue is down 5.0% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Orascom Development Holding AG Been A Good Investment?

With a total shareholder return of -59% over three years, Orascom Development Holding AG shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Orascom Development Holding you should be aware of, and 1 of them doesn't sit too well with us.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.