Here's Why Shareholders May Want To Be Cautious With Increasing EFG International AG's (VTX:EFGN) CEO Pay Packet

Key Insights

• EFG International to hold its Annual General Meeting on 21st of March
• CEO Giorgio Pradelli's total compensation includes salary of CHF1.79m
• The overall pay is 299% above the industry average
• EFG International's EPS grew by 17% over the past three years while total shareholder return over the past three years was 123%

Performance at EFG International AG (VTX:EFGN) has been reasonably good and CEO Giorgio Pradelli has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21st of March. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for EFG International

How Does Total Compensation For Giorgio Pradelli Compare With Other Companies In The Industry?

At the time of writing, our data shows that EFG International AG has a market capitalization of CHF4.1b, and reported total annual CEO compensation of CHF7.4m for the year to December 2024. We note that's an increase of 35% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF1.8m.

On comparing similar companies from the Swiss Capital Markets industry with market caps ranging from CHF1.8b to CHF5.7b, we found that the median CEO total compensation was CHF1.9m. Hence, we can conclude that Giorgio Pradelli is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 32% of total compensation out of all the companies we analyzed, while other remuneration made up 68% of the pie. In EFG International's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

EFG International AG's Growth

EFG International AG has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 5.1% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 EFG International AG Been A Good Investment?

We think that the total shareholder return of 123%, over three years, would leave most EFG International AG shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for EFG International that investors should think about before committing capital to this stock.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.