Here's What We Learned About The CEO Pay At Sonova Holding AG (VTX:SOON)

Arnd Kaldowski became the CEO of Sonova Holding AG (VTX:SOON) in 2018, 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 Sonova Holding pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Sonova Holding

How Does Total Compensation For Arnd Kaldowski Compare With Other Companies In The Industry?

According to our data, Sonova Holding AG has a market capitalization of CHF14b, and paid its CEO total annual compensation worth CHF3.7m over the year to March 2020. We note that's an increase of 11% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF900k.

In comparison with other companies in the industry with market capitalizations over CHF7.1b , the reported median total CEO compensation was CHF2.7m. This suggests that Arnd Kaldowski is paid more than the median for the industry.

On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. Sonova Holding pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Sonova Holding AG's Growth Numbers

Over the last three years, Sonova Holding AG has shrunk its earnings per share by 2.6% per year. It saw its revenue drop 11% over the last year.

The lack of EPS growth is certainly unimpressive. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Sonova Holding AG Been A Good Investment?

Most shareholders would probably be pleased with Sonova Holding AG for providing a total return of 52% over three years. 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...

As we noted earlier, Sonova Holding pays its CEO higher than the norm for similar-sized companies belonging to the same industry. The company isn't growing EPS, but shareholder returns have been impressive over the last three years. So while we would not say that Arnd is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

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 2 warning signs for Sonova Holding that investors should think about before committing capital to this stock.

Switching gears from Sonova Holding, 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. 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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