Here's Why Shareholders May Want To Be Cautious With Increasing Zurich Insurance Group AG's (VTX:ZURN) CEO Pay Packet

Key Insights

• Zurich Insurance Group will host its Annual General Meeting on 10th of April
• CEO Mario Greco's total compensation includes salary of US$2.09m
• The overall pay is 206% above the industry average
• Zurich Insurance Group's total shareholder return over the past three years was 39% while its EPS grew by 5.3% over the past three years

Performance at Zurich Insurance Group AG (VTX:ZURN) has been reasonably good and CEO Mario Greco has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 10th of April. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Zurich Insurance Group

Comparing Zurich Insurance Group AG's CEO Compensation With The Industry

At the time of writing, our data shows that Zurich Insurance Group AG has a market capitalization of CHF70b, and reported total annual CEO compensation of US$12m for the year to December 2023. Notably, that's an increase of 15% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$2.1m.

On comparing similar companies in the Swiss Insurance industry with market capitalizations above CHF7.3b, we found that the median total CEO compensation was US$3.8m. Accordingly, our analysis reveals that Zurich Insurance Group AG pays Mario Greco north of the industry median. Moreover, Mario Greco also holds CHF54m worth of Zurich Insurance Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$2.1m	US$1.8m	18%
Other	US$9.6m	US$8.3m	82%
Total Compensation	US$12m	US$10m	100%

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 Zurich Insurance Group allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Zurich Insurance Group AG's Growth Numbers

Zurich Insurance Group AG's earnings per share (EPS) grew 5.3% per year over the last three years. Its revenue is up 29% over the last year.

We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 Zurich Insurance Group AG Been A Good Investment?

Most shareholders would probably be pleased with Zurich Insurance Group AG for providing a total return of 39% 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Zurich Insurance Group that you should be aware of before investing.

Switching gears from Zurich Insurance Group, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.