This Is Why Bâloise Holding AG's (VTX:BALN) CEO Compensation Looks Appropriate

The share price of Bâloise Holding AG (VTX:BALN) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 30 April 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Bâloise Holding

Comparing Bâloise Holding AG's CEO Compensation With the industry

Our data indicates that Bâloise Holding AG has a market capitalization of CHF7.1b, and total annual CEO compensation was reported as CHF2.0m for the year to December 2020. That's a slight decrease of 7.7% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF950k.

In comparison with other companies in the industry with market capitalizations ranging from CHF3.7b to CHF11b, the reported median CEO total compensation was CHF2.0m. This suggests that Bâloise Holding remunerates its CEO largely in line with the industry average. Moreover, Gert Winter also holds CHF5.7m worth of Bâloise Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	CHF950k	CHF950k	47%
Other	CHF1.1m	CHF1.3m	53%
Total Compensation	CHF2.0m	CHF2.2m	100%

On an industry level, around 39% of total compensation represents salary and 61% is other remuneration. Bâloise Holding is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Bâloise Holding AG's Growth

Bâloise Holding AG has reduced its earnings per share by 5.7% a year over the last three years. Its revenue is down 20% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Bâloise Holding AG Been A Good Investment?

Bâloise Holding AG has served shareholders reasonably well, with a total return of 12% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Bâloise Holding that investors should think about before committing capital to this stock.

Switching gears from Bâloise 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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