Our View On Emmi's (VTX:EMMN) CEO Pay

Urs Riedener became the CEO of Emmi AG (VTX:EMMN) in 2008, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Emmi pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Emmi

How Does Total Compensation For Urs Riedener Compare With Other Companies In The Industry?

At the time of writing, our data shows that Emmi AG has a market capitalization of CHF4.7b, and reported total annual CEO compensation of CHF1.5m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at CHF871.0k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between CHF3.6b and CHF11b, we discovered that the median CEO total compensation of that group was CHF1.5m. From this we gather that Urs Riedener is paid around the median for CEOs in the industry.

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. Emmi is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Emmi AG's Growth

Emmi AG has seen its earnings per share (EPS) increase by 3.3% a year over the past three years. It achieved revenue growth of 4.6% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 Emmi AG Been A Good Investment?

Most shareholders would probably be pleased with Emmi AG for providing a total return of 43% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we touched on above, Emmi AG is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the business isn't reporting great numbers in terms of EPS growth. Meanwhile, shareholder returns have remained positive over the same time frame. We would like to see EPS growth from the business, although we wouldn't say the CEO compensation is high.

So you may want to check if insiders are buying Emmi shares with their own money (free access).

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. 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.
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