Increases to Clariant AG's (VTX:CLN) CEO Compensation Might Cool off for now

Key Insights

• Clariant to hold its Annual General Meeting on 9th of April
• Total pay for CEO Conrad Keijzer includes CHF1.20m salary
• The overall pay is 106% above the industry average
• Clariant's three-year loss to shareholders was 31% while its EPS grew by 17% over the past three years

Shareholders of Clariant AG (VTX:CLN) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 9th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Clariant

How Does Total Compensation For Conrad Keijzer Compare With Other Companies In The Industry?

According to our data, Clariant AG has a market capitalization of CHF4.0b, and paid its CEO total annual compensation worth CHF5.2m over the year to December 2023. Notably, that's an increase of 20% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CHF1.2m.

On comparing similar companies from the Swiss Chemicals industry with market caps ranging from CHF1.8b to CHF5.8b, we found that the median CEO total compensation was CHF2.5m. This suggests that Conrad Keijzer is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	CHF1.2m	CHF1.2m	23%
Other	CHF4.0m	CHF3.1m	77%
Total Compensation	CHF5.2m	CHF4.3m	100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. Clariant sets aside a smaller share of compensation for 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.

A Look at Clariant AG's Growth Numbers

Clariant AG has seen its earnings per share (EPS) increase by 17% a year over the past three years. It saw its revenue drop 16% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Clariant AG Been A Good Investment?

Few Clariant AG shareholders would feel satisfied with the return of -31% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Clariant that investors should be aware of in a dynamic business environment.

Important note: Clariant 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. 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.