Here's What We Think About ORIOR's (VTX:ORON) CEO Pay

Daniel Lutz became the CEO of ORIOR AG (VTX:ORON) in 2014, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for ORIOR

Comparing ORIOR AG's CEO Compensation With the industry

Our data indicates that ORIOR AG has a market capitalization of CHF485m, and total annual CEO compensation was reported as CHF902k for the year to December 2019. That's a slightly lower by 7.9% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF407k.

For comparison, other companies in the same industry with market capitalizations ranging between CHF182m and CHF729m had a median total CEO compensation of CHF656k. Hence, we can conclude that Daniel Lutz is remunerated higher than the industry median. What's more, Daniel Lutz holds CHF238k worth of shares in the company in their own name.

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. There isn't a significant difference between ORIOR and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ORIOR AG's Growth

Over the last three years, ORIOR AG has shrunk its earnings per share by 8.9% per year. Its revenue is up 3.7% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 ORIOR AG Been A Good Investment?

With a total shareholder return of 8.2% over three years, ORIOR AG has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we touched on above, ORIOR AG is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS has not been growing sufficiently to impress us, over the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you can understand why we do not think CEO compensation is particularly modest!

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 2 warning signs for ORIOR that investors should be aware of in a dynamic business environment.

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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