What Can We Make Of Bâloise Holding's (VTX:BALN) CEO Compensation?

Gert Winter became the CEO of Bâloise Holding AG (VTX:BALN) in 2016, 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.

View our latest analysis for Bâloise Holding

How Does Total Compensation For Gert Winter Compare With Other Companies In The Industry?

Our data indicates that Bâloise Holding AG has a market capitalization of CHF6.8b, and total annual CEO compensation was reported as CHF2.2m for the year to December 2019. That's a modest increase of 5.5% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF950k.

For comparison, other companies in the same industry with market capitalizations ranging between CHF3.5b and CHF11b had a median total CEO compensation of CHF2.2m. From this we gather that Gert Winter is paid around the median for CEOs in the industry. What's more, Gert Winter holds CHF4.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 35% of total compensation represents salary, while the remainder of 65% is other remuneration. It's interesting to note that Bâloise Holding pays out a greater portion of remuneration through salary, compared to the 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 6.9% a year over the last three years. It saw its revenue drop 8.3% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Bâloise Holding AG Been A Good Investment?

Bâloise Holding AG has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. 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.

In Summary...

As we touched on above, Bâloise Holding 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. Bâloise Holding has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn't compare well with CEO compensation, which is largely in line with the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.

Whatever your view on compensation, you might want to check if insiders are buying or selling Bâloise Holding shares (free trial).

Important note: Bâloise Holding is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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